Management System: Real Property Management
Subject Area: Acquisition of Real Property

Procedure 8. Acquiring Real Property by a Contractor Lease

Management System Coordinators
Process Steward:
Implementation Lead:
Subject Matter Expert:

Latest MS Specific Document Revision Date 4/29/2022
Latest MS Total Biennial Review Completed 4/29/2022
SCMS Revision 4.3

1.0  Applicability

This procedure applies to any U.S. Department of Energy (DOE) Office of Science (SC) employee who oversees a contractor that has identified a need to acquire real property by lease under the purview of SC. DOE may authorize its contractors to acquire leased space to house contractor personnel; however, DOE is responsible for overseeing the lease procurement of its contractor when the rental is directly reimbursed under the DOE contract. The acquisition of the leasehold interest will follow the same procedures and be subject to the same requirements as though DOE were signing the lease. The contractor may not lease general purpose office space to house DOE or other Governmental personnel.

Leases may be used to acquire needed special purpose facilities or land. When leasing building space, all leased space must be acquired, designed, and occupied in a manner which meets all legal and regulatory requirements. For detailed reference material, refer to the DOE Real Estate Desk Guide, Chapter 4.

All Federal agencies must follow the budget scoring rules for leases, capital leases, and lease-purchases identified in Appendices A and B of OMB Circular A-11, "Preparation, Submission and Execution of the Budget."

2.0  Required Procedure

Step 1

The Sponsoring Program(s) approves the mission need justification for new lease space. These types of leases are funded through the Laboratory’s overhead and are sometimes referred to as “institutional leases” or “reimbursable contractor leases.”

Step 2

The SC Site Office or the SC Consolidated Service Center (CSC) receives the request to acquire the leased space from the contractor. Such requests will include:

  • A detailed description of the space requirements (i.e., total amount of space required, special requirements, and associated parking requirements);

  • The length of time the space will be needed;

  • A statement that a review of existing space on site has been performed and that no existing space is available that will meet the requirement;

  • A statement to verify that the lease property is not located within a floodplain;

  • The preferred area of consideration for the space including justification for the location and an area map; and

  • A total cost estimate for the lease action.

Step 3 The SC Site Office reviews and concurs in the request and forwards the request to the Certified Realty Specialist (CRS) or Real Estate Contracting Officer (RECO) for coordination with other Federal agencies.
Step 4 The CRS or RECO coordinates with the U.S. General Services Administration (GSA), and if appropriate, local DOE offices, and other Federal property holding agencies to determine if the program need can be satisfied utilizing Government-owned space.
Step 5
  1. If Government-owned space is available, the CRS will notify the SC Site Office (if applicable) and will work with the agency controlling the space to assign the space to the contractor.

  2. If Government-owned space is not available, the CRS will notify the SC Site Office or the SC Contracting Officer (CO) that the contractor may start the process to acquire the space by lease.

Step 6

The SC Site Office or the SC CSC, in conjunction with the contractor, develops a potential list of available properties by conducting a thorough Market Survey. The Market Survey should include as a minimum:

  • The name and address of the building visited;

  • The amount of space available;

  • Current and proposed rental rate;

  • Services included in the rental; and

  • Length of proposed rental agreement.

Step 7

The SC Site Office or the SC CSC works with the contractor to prepare and issue a Solicitation for Offers (SFO). The SFO normally consists of:

  • General space requirements, including evaluation and award factors;

  • General building requirements including architectural, mechanical, electrical, plumbing, etc.;

  • Services, utilities and maintenance;

  • Special requirements;

  • Safety and fire prevention requirements; and,

  • Required Terms and Conditions.

NOTE: New lease and build-to-suit lease solicitations are to include a preference for buildings certified to the LEED Gold Standard (see Executive Order [E.O.] 13423, Strengthening Federal Environmental, Energy, and Transportation Management).

A SFO is helpful in generating interest in the procurement and market availability, and developing competition. The characteristics of an SFO can be sent to all Parties that have the potential of meeting the established requirements.

Step 8

The SC Site Office or the SC CSC works with the contractor to advertise for space, as appropriate.

Step 9

The SC Site Office or the SC CSC works with the contractor to evaluate offers in accordance with the SFO, negotiates with offerors, and prepares negotiation report.

Offerors not meeting the minimum requirements of the solicitation will not be considered further.

A determination of which offer represents the best value to the government is made.

Step 10

The SC Site Office or the SC CSC in conjunction with the contractor issues a letter to the offerors representing the best value to the government and requests best and final offers.

Step 11

The SC Site Office or the SC CSC works with the contractor to evaluate final offers.

Step 12
  1. If a detailed Market Survey is provided and prior approval from the CRS or RECO is obtained, the requirement for providing an appraisal can be waived.

  2. If applicable, an appraisal is requested.

Step 13

The SC Site Office or the SC CSC in conjunction with the contractor prepares a lease agreement and submits a complete lease package for review and CRS or RECO approval.

Step 14

WHEN APPLICABLE: The SC Site Office or the SC CSC CRS or RECO shall request approval of the indemnification clause on leases containing indemnity and/or hold harmless clauses through the Office of Acquisition Management - Management & Operating Policy Team. 

Step 15

The CRS or RECO distributes the lease agreement and supporting documentation to the Real Estate Committee or appropriate personnel for review and comment. The CRS or RECO works to resolve any comments.

NOTE: Additional subject matter experts may be consulted during the review process as necessary to ensure that all other areas are adequately covered.

Step 16

If comments and concerns can be readily addressed, the CRS or RECO forwards approval of the lease to the SC Site Office or contractor.

NOTE: The CRS or RECO “approval” in this context means that the proposed lease meets the Government requirements and does not direct or authorize the management and operating (M&O) contractor to commit Federal monies for the lease.

Step 17

In those instances where further negotiations with the Prospective Lessor will be required and/or additional documentation is required, the CRS or RECO returns the lease to the contractor or the SC Site Office without approval.

Step 18

The SC Site Office or the SC CSC, in conjunction with the contractor, is required to adequately address the comments and resubmit the revised lease and supporting documentation for the Committee’s or appropriate personnel’s review and approval.

Step 19 The CRS or RECO forwards approval letter to the SC Site Office or contractor as described in Step 16 above.
Step 20

The contractor awards the lease.

Step 21

The contractor sends a copy of the signed lease to the SC CSC or the SC Site Office.

Step 22

The SC Site Office in conjunction with the contractor inspects, measures, and accepts the space prior to occupancy and provides the appropriate documentation for the official file.

Step 23 The Facilities Information Management System (FIMS) Administrator will enter the information in the FIMS database.

3.0  References