The GSA is Inviting Bids for Flexible Office Space Providers in Major and Midsize Cities
The federal government has signaled its interest in offsetting some of its office space needs through coworking providers, issuing a request for proposals (RFP) for 12-month contracts across more than two dozen MSAs.
Issued by the General Services Administration (GSA), an independent agency tasked with procurement services for the U.S. government, the RFP is seeking a base year of service with the option for four additional years. It requires seven-day availability and rates for unreserved and reserved workspaces. The 12-month contract maxes out at $10 million. The RFP is also open to small businesses sized at under $30 million in revenue, which is welcome news to the coworking industry, which is dominated by a handful of larger providers. Commercial real estate services firm Cushman & Wakefield estimates there are more than 200 providers in the U.S. with at least one 5,000-square-foot location, but only 20 providers with more than 10 locations.
The RFP presents the latest new revenue stream for coworking and flexible workspace firms across the country. With demand for flexible office space expected to increase globally over the next decade, coworking providers are steadfastly pushing forward, despite the heavily publicized financial woes of one-time industry leader WeWork. A 2018 report on the state of coworking by commercial real estate services firm Cushman & Wakefield expects the amount of space to triple by 2028, taking 5-10%% of office space in global gateway markets. Currently there is about 125 million square feet of coworking space globally, with about 50 million square feet in the U.S., Cushman & Wakefield found. A 2019 survey by Cushman & Wakefield and thinktank CoreNet Global of nearly 600 CRE executives representing global and regional corporations found that the media company surveyed keeps 3% of its employee base in coworking space, with the figure expected to grow fivefold within five years.
GSA is signaling its acceptance of this newer way of working, noting in its RFP that “The freedom provided by technological advancements allows agencies to efficiently and flexibly pursue mission success through the utilization of employee mobility and telework.”
Adds the RFP, “This shift in capability has resulted in greater flexibility and mission response across the Federal Government. GSA is seeking nationwide Flexible Coworking Service (FCS) solutions that provide federal employees with flexible workspace solutions in order to occupy only the space needed in order to meet their missions and promote a responsible use of taxpayer dollars.”
The GSA said it is seeking solutions that “include individuals working independently or co-working collaboratively in shared office space. The contractor shall provide a work environment akin to a typical office, usually inclusive of office equipment and amenities. Typical features of co-working facilities include work spaces, wireless internet, communal printer/copier/fax, shared kitchens, restrooms and open seating areas. This may also be referred to as a “shared office.”
The agency has classified its geographic needs as Tier 1 and Tier 2 cities, but seems to leave the possibility open for smaller cities, under a Tier 3 classification. Among the Tier 1 cities it is pursuing for flexible space are Boston, Chicago, New York City, San Francisco and Seattle. Tier 2 cities include Atlanta, Miami, Denver, Detroit, Salt Lake City, New Orleans and Philadelphia.
Colliers International Head of Flexible Workspace Consulting Francesco De Camilli told media outlet Bisnow that GSA’s “approach is to pick the best-in-market operators, not to establish a single point of contact with a national platform.” It is estimated that GSA leases about 370 million square feet office space nationally, so even a slice of business as small as 2% “represents a huge opportunity,” De Camili said.
Bids are due by Jan. 30. The RFP can be viewed here.
Further reporting on this topic can be read at Bisnow.com.