JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Justification for Other than Full and Open Competition U.S. General Services Administration GSA Region 9 Real Estate Acquisition Division LEASE NUMBER: GS-09B-01865 PROJECT NUMBER: 3HI0237 AGENCY NAME: TSA - 1. Identification and Description of Action Being Approved: Approval is requested to execute a two-year, soft-term lease extension commencing on February 1, 2014 without full and open competition for the Transportation Security Administration (TSA) at 425 Koloa Street, Kahului, HI. This extension will provide GSA with sufficient time to complete the construction in the succeeding office space at 425 Koloa Street, Kahului, HI. The extension will be negotiated at an annual amount below the prospectus level of $2.79M. - 2. Description of Supplies or Services Required: TSA currently occupies 4,287 rentable square feet of leased office and related space at 425 Koloa Street, Kahului, HI under lease number LHI01865. The construction of the new space is expected to be completed in 2016. Lease number GS-09B-01865 expires on January 31, 2014. TSA needs housing for an additional two years to allow for completion of their new space. The current annual rent is $260,930.40 for 4,287 rsf. The rent for the extension period is not expected to increase. The estimated total cost for the two (2) years full term lease extension is estimated to be $521,860.80. Extending the lease is necessary to protect the Government's occupancy while construction of TSA's new space is completed. - 3. Identification of Statutory Authority: 41 U.S.C. - 3304 (a) (1), Only one responsible source and no other supplies or services will satisfy agency requirements. - 4. Demonstration that the Acquisition Requires use of the Authority Cited: GSAM 570.405 (c) (2) permits contracting without providing for full and open competition when the property or services needed by the agency are available from only one responsible source and no other type of property or services will satisfy the needs of the agency. This authority may apply to lease extensions in situations such as the Government encounters unexpected delays outside of its control in acquiring replacement space. There are no other buildings that can meet the requirements of this extension at a reasonable cost because the Government can not expect to recover costs duplicated through competition. The following chart represents a comparison of the cost of staying at the same location to the cost of moving to a different location. Cost-Benefit Analysis 2-Years Term Extension Description Present Location (4,287 RSF/ 4,287 USF) Alternative Location (4,287 RSF/ 4,287 USF) Lease Rental Rate @$60.87/RSF* For 2 years full term $521,860.80 Lease Rental Rate @$47.00/RSF** For 2 years full term $402,978.00 General and Customization TI Allowance ($51.71/USF) for new space for 2 years $221,682.48 Moving Cost @ $2.50/USF $10,717.50 Telecommunications Cost @ $11.00/USF $47,157.00 TOTAL COST for 2 Years: $521,860.80 $682,534.98 TOTAL SAVINGS $160,674.18 * $60.87/RSF annually is based on the current rental rate to stay in the space for 2 years extension term, which is justified for this relatively short term. ** $47.00/RSF annually is based on the average rental rates within Kahului, HI. Telecommunication Costs are based on $11.00/usf Moving Costs are based on $2.50/usf The cost of relocating TSA to a new site for two (2) years full term exceeds the cost of remaining in their current location and completing a lease extension at the existing TSA location. The savings to the Government is $160,674.18 for two (2) years full term. If other space was leased for the extension period through the competitive process, the Government would incur build-out, relocation costs and double move costs, first to their temporary space and then to their permanent space. A double move would create an administrative hardship and interrupt agency mission and day to day operations. - 5. Description of Efforts to Solicit as Many Offers as Practicable: GSAM 570.106 (d) exempts lease extensions from the usual advertisement requirements. See market analysis in the section "Description of the market analysis conducted." - 6. Demonstration that the Anticipated Cost will be Fair and Reasonable: GSA conducted supplemental market research, within this area of delineation, using recently completed Government leases to determine comparable rates. Recent market surveys conducted by GSA in Kahului, HI showed the rental rates within the delineated area, for similar spaces, ranges from $30.00/rsf to $63.00/rsf. Please see next section for further details. - 7. Description of the Market Analysis Conducted: A market analysis was conducted on January 6, 2014 by comparing the rental rate at other buildings in Kahului, HI. Based on the analysis, the market rental rate in Kahului, HI for an office space is approximately $30.00/rsf to $63.00/rsf fully serviced. The average full service rental rate is $47.00 per rsf. This number is comprised of the shell and operating rate. . The following three locations at the indicated rates were identified: Location Full Service Approx. Rate excluding TI Space Available (RSF) Option #1: 270 Dairy Road, Kahului, HI 96732 $ 48.00 / RSF 11,547 RSF Option #2: 52 Maui Lani Parkway, Wailuku, HI 96793 $ 63.00 / RSF 12,945 RSF Option #3: 110 Kaahumanu Avenue, Kahului, HI 96732 $ 30.00 / RSF 7,373 RSF Average Rate $ 47.00 / RSF - 8. Other Facts Supporting the use of Other Than Full and Open Competition: None. - 9. List of Sources that expressed interest in the acquisition: None. - 10. Statement of Actions to Overcome Barriers to Competition: GSA intends to move TSA into their new lease suite location as soon as the construction is completed. - 11. Contracting Officers Determination and Certification: By signature on this Justification for Other than Full and Open Competition, the Contracting Officer certifies that the award of a lease to 425 Koloa Street is in the Governments best interest and that the justification is accurate and complete to the best of my knowledge and belief. PREPARED BY: _____________________________________________________________ Clara Lee/Lease Contracting Specialist (9P4PR) Date CERTIFIED: _____________________________________________________________ Veronica Gonzalez/ Lease Contracting Officer (9P4PR) Date