New GAO Study on the value of GSA's Broker Contract

The John McCain National Defense Authorization Act of 2019 –(the same law that, per Section 889, prohibits certain telecom sources in gov’t contracts) also included a provision commissioning GAO to study whether GSA’s contract brokers actually save the government money.  GAO studied this subject in 2007 and again in 2013 and both times came to the conclusion that they couldn’t find any genuine savings. GAO has just completed their third study; it was published late last month, and again, they conclude that there is no solid evidence that the program (with the commission pay structure—which, since 2006, has earned the brokers cumulatively $390 mil) saves the government money.  As part of this study, GAO interviewed three economists who have published on commercial brokerage activity, and they hold, collectively, that rental rates are driven by market forces, and are not influenced by broker negotiation.  GAO also interviewed GSA lessors, and disclose that four lessors aver that the broker commission costs are passed onto GSA in higher rents.