General Services Administration; JOTFOC

Justification for Other Than Full and Open Competition, Lease Extension U.S. General Services Administration GSA Region 07 Leasing Division JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION PROJECT NUMBER: 3LA0252 Agency Name: DHS Office of the Secretary U.S. Immigration & Customs Enforcement (ICE) 1. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED. The General Services Administration (GSA) currently leases 53,001 ABOA / 60,173 rentable square feet (RSF) of office space at the Poydras Building, located at 1250 Poydras Street, New Orleans, LA under lease number GS-07P-LLA15059 for the DHS Office of the Secretary - US Immigration and Customs Enforcement (ICE). The current lease houses 3 subgroups of ICE: HSI, OPLA and ERO. The current lease expired May 4, 2023. ICE submitted a continuing needs letter on August 20, 2020. Initially the intent was for ICE to downsize and for GSA to move forward with a new, replacing lease for HSI and ERO for a total of 37,427 ABOA SF using full and open competition. The intent for OPLA was to move into government-owned space in accordance with GSA's requirement to give first consideration to government-owned space. However, upon further review of the long term needs of ICE, it was determined that a succeeding lease for ICE was in the best interest of the Government. In September 2022, a JOTFOC was routed and signed for project 0LA2222. This JOTFOC sought approval to house all 3 subgroups of ICE under a succeeding lease. The succeeding lease was to be used to satisfy occupancy needs for HSI as a long term solution and as a short term housing solution for OPLA and ERO as follows: Block A: ICE, HSI consisting of 34,452 ABOA SF. The space fully meets the requirements of this subgroup, therefore, GSA would seek a new, succeeding lease for 17 years / 15 years firm. Block B: ICE, ERO consisting of 13,526 ABOA SF would be housed under the new, succeeding lease as a short term solution. GSA would seek a term of 17 years, 1 year firm. ERO would then move into space under a new / replacing lease at a different location. This new lease was awarded using full and open competition on December 21, 2020. Design and construction activities are underway and occupancy is expected in 2024. Block C: ICE, OPLA consisting of 5,023 ABOA SF would be housed under the new, succeeding lease as a short term solution. GSA would seek a term of 17 years, 1 year firm. OPLA would then move into government-owned space. The design and construction activities are underway and occupancy is expected in 2024. An RLP was issued in October 2022 for the above long term and short term scenario. Upon receipt of the Initial Offer, the GSA Broker Contractor and the LCO initiated negotiations. The final offered rental rate was high compared to the Bullseye Market rate. Based upon further discussions with the Incumbent Lessor, it was understood there was a rent premium applied for the short term occupancies, which in turn increased the overall rate for the entire succeeding lease. DocuSign Envelope ID: 34D7E302-7E01-4160-A6FD-A7393C20137E Revised 12-06-2022 Internal discussions were had to explore ways to reduce the cost of the long term succeeding lease. By removing the short term requirements for OPLA and ERO from the long term succeeding lease, the Incumbent Lessor was willing to lower the rent for the succeeding lease by approximately per RSF. It was, therefore, determined to be in the best interest of the Government to work the long term requirement for HSI separately from the short term requirement for OPLA and ERO. The long term requirement would remain a 17 year / 15 year firm succeeding lease for HSI and the short term requirement would be a 3 year / 15 months firm lease extension for OPLA and ERO. Therefore, approval is requested to negotiate a lease extension with the incumbent Lessor without full and open competition for continued occupancy for ICE subgroups OPLA and ERO at the current leased location. Of the total 53,001 ABOA SF under lease, OPLA and ERO occupy 18,549 ABOA SF. Therefore, this lease extension is for 18,549 ABOA SF. The procedures for pursuing a lease extension are detailed in GSAR 570.405: Lease extensions. 2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS (INCLUDING ESTIMATED VALUE). The government requires an extension of the current lease for 36 months / 15 months firm to commence on May 4, 2023. The estimated cost of this lease extension is per rentable square feet per year for an annual cost of and a total contract value of 3. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION. 41 U.S.C. 3304(a)(1): Only one responsible source and no other supplies or services will satisfy agency requirements. This statutory authority is implemented through GSAR 570.405. In accordance with GSAR 570.405, use of the sole source authority is appropriate under the circumstances listed below (the two which are designated with an - x and in bold are applicable here): x The agency occupying the leased space is scheduled to move into other Federally controlled space, but encounters unexpected delays in preparing the new space for occupancy (ICE, OPLA will be moving into Federally controlled space, anticipated occupancy in 2024.) x The government encounters unexpected delays outside of its control in acquiring replacement space (ICE, ERO will be moving into alternate lease space at a different location, space awarded using full and open competition.) ? The government is consolidating various agencies and the contracting officer needs to extend the terms of some leases to establish a common expiration date ? The agency occupying the space has encountered delays in planning for a potential relocation to other federally controlled space due to documented organizational, financial, or other uncertainties 4. DEMONSTRATION THAT THE PROPOSED CONTRACTOR'S UNIQUE QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED. It is in the best interest of the Government to remain at the current location during the extension period. The agency occupying the leased space is scheduled to move into other Federally controlled and leased space but encountered unexpected delay preparing the new space for occupancy. Award to other than the current Lessor would require relocation of the entire requirement and would cause ICE to incur move and replication costs that would not be recovered through competition. 5. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS PRACTICABLE. In accordance with GSAM 570.106(d) and 570.405, an advertisement is not required for extensions. DocuSign Envelope ID: 34D7E302-7E01-4160-A6FD-A7393C20137E Revised 12-06-2022 6. DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE. Recent market research conducted by the Lease Contracting Officer in New Orleans, LA showed the rental rate within the market area ranges from $24.50 to $35.00. The anticipated rental rate for this lease extension of per RSF, is above the current market range for this submarket and deemed fair and reasonable by the GSA Lease Contracting Officer. While the anticipated rate is higher than market, the market rates are based on long-term leases with terms of 3 to 5 years firm. 7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS. In April 2023, market research was conducted using CoStar. The market research showed the rental rate within the market area ranges from $24.50 to $35.00. The anticipated rental rate for this lease extension is over market, as the Lessor is seeking a rent premium due to the short-term firm term. 8. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION. A JOTFOC for an associated leasing action was approved in September 2022 as a succeeding lease under project 0LA2222. However, during the course of negotiations, the LCO found it to be more favorable to the government for the short term requirement to be a separate lease action rather than be part of the succeeding lease. Therefore, remaining at the current location under a 3 year / 15 month firm term lease extension is being requested. 9. LIST OF SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE ACQUISITION. N/A 10. STATEMENT OF ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION. There are no systemic barriers to competition. If the agency has a continuing need for space upon lease expiration, GSA will follow all authorities, regulations and policies applicable to lease acquisition. Should there be remaining useful life in the Government's tenant improvements, the Government will consider the cost of moving from the existing location, and the cost to build out new space when deciding whether to undergo a competitive action. Additionally, objective scrutiny will be given to the customer agency's mission and security requirements (if applicable) to eliminate unnecessary agency space requirements that may be deemed unduly restrictive. DocuSign Envelope ID: 34D7E302-7E01-4160-A6FD-A7393C20137E