Lease Extension Award Justification for Other than Full and Open Competition

Justification for Other Than Full and Open Competition - Extension U.S. General Services Administration GSA Region 04 Leasing Division - Branch 4PR1B JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION LEASE NUMBER: GS-04B-LGA46013 PROJECT NUMBER: 3GA0297 Agency Name: Food & Drug Administration (FDA) A/B Code: 7605 1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED The General Services Administration currently leases 72,220 rentable square feet (RSF) of office space with a Common Area Factor (CAF) of 1.15, yielding 62,800 ANSI BOMA Office Area square feet (ABOA) at 60 Eight Street, Atlanta, GA under lease number GS-04B-LGA46013 for the Food & Drug Administration (FDA). The current lease expires November 24, 2017. Approval is requested to negotiate a lease extension with the incumbent Lessor without full and open competition for continued occupancy of this location for a five (5) years; four (4) years firm term. 2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED. The current lease agreement for the Food & Drug Administration (FDA), located in Atlanta, Georgia, will expire on November 24, 2017. The Food & Drug Administration submitted a mission related justification to remain in a modified delineated area for twenty (20) years in the form of a prospectus submital. Prospectus PGA-01-AT17 was approved by both the House and Senate on July 12, 2017 fo 162,000 RSF with a Common Area Factor (CAF) of 1.15 yielding a minimum of 134,491 ANSI BOMA Office Area square feet (ABOA) and 27 parking spaces for a twenty (20) years firm term. The FDA needs to remain at the current location until the full and open competition prospectus Project 6GA0193 can be completed. The project may result in either a Succeeding or New/Replacing lease. Regardless, either scenario will result in significant construction, alterations and relocation(s)/swing space. The current location requires no significant tenant improvements. Implementing a lease extension will avert extensive and costly build-out associated with a relocation to another facility. There is no vacant Federal space (laboratory) available. The FDA improvements and laboratory requirements for this specialized type of space (i.e., IT/Communication systems; vacuum containment units; training facilities; an indoor auto- clave for sterilizing scientific equipment; storage; room size freezers; high ceiling plenum clearances; and lab venting hood systems) are more extensive than typical improvements found in standard office space. These improvements would have to be reconstructed in any alternate. Relocation which will cause the government to incur unreasonable move and replication costs for a short term solution. The FDA facility is an ISC Level III secured property that dictates a freestanding, single-tenant building. Considering the special build-out requirements, disruptions to operations, move and replication expenses, it is not in the government's economic interest to relocate the agency for the short-term while the long term prospectus requirement is fulfilled. The Congressionally approved Prospectus PGA-01-AT17 long-term agency requirement is: Term: 20 years Projected Occupancy: December 2020 Maximum Rental Rate: $37.00 PRSF Proposed Total Annual Rent: $5,994,000.00 Proposed Maximum Building Size: 162,000 RSF / 134,491 ABOASF Parking: 27 surface/structured secured GOV spaces Current UR Rate PP: 84 (office); 305 (lab) Proposed UR Rate PP: 119 (office); 322 (lab) Delineated Area: Mid-Town Atlanta; Northeast Atlanta inside I-285 and Southeast Atlanta Description: 2 - 3 story low-rise office/lab building Acquisition Strategy: In order to maximize the flexibility in acquiring space to house FDA, GSA may issue a single, multiple award solicitation that will allow offerors to provide blocks of space able to satisfy the requirements in whole or part. Existing buildings are preferred versus new build. Broker Tasked (GLS): Public Properties, Washington, DC The estimated annual cost of this Lease LGA46013 is $42.71 per RSF; Total Annual Rent is $3,084,516.20 which Operating Rent is subject to annual CPI Adjustments. 4 Year Firm Term: $42.711 PRSF x 72,220 RSF = $3,084,516.20 x 4 years = $12,338,064.80 1 Year Soft Term2: $42.71 PRSF x 72,220 RSF = $3,084,516.20 x 1 year = $3,084,516.20 1 Shell + Operating Cost 2 Non-Firm Term plus 4 x 1 year automatic renewals to be ascertained by November 24 annually. For a Total Contract Value for 5 years = $15,422,581.00 The offer from Sugarman-Garber, LLC located at 617 Loridans Drive, Atlanta, GA 30342 is the lowest-priced, technically-acceptable offer for a five (5) years; four (4) years firm term lease with a present value of $42.71 per ABOA SF. Sugarman-Garber, LLC offered a full-service rate of $42.71 per RSF for years 1 through 5. The additional four (4) one (1) year Renewal Periods (if necessary) escalate annually by ten (10%) percent for the Shell and the Operating Cost will continue with annual CPI adjustments. 3. IDENTIFICATION OF STATUTORY AUTHORITY. a. FAR 6.302.1 / 41 U.S.C. 253(c)(1): Only one responsible source and no other supplies or service will satisfy agency requirements. b. GSAM 570.402-4: No Potential Acceptable locations. c. Congressional approved Prospectus PGA-01-AT17, Para. 6, grants GSA Interim Leasing Authority for leasing actions as necessary to ensure continued housing of the tenant agency prior to the effective date of the new lease. It is in the best interest of the Government to avert the financial risk of holdover tenancy. 4. DEMONSTRATION THAT THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED. GSAM 570.402-4 allows for negotiation with the incumbent Lessor when a cost-benefit analysis cannot be provided due to the fact comparable sources in the delineated area are not available. The Public Building Service (PBS) placed an advertisement conforming to GSAM 570.402-2 on the Federal Business Opportunities Web site (fedbizopps.gov) on February 28, 2017 and received only one legitimate response. The incumbent Lessor's expression of interest indicated that the rate would be the current $42.71 per RSF rate. The rate is broken out as $34.85 for Shell plus the Operating rate of $7.86 per RSF subject to annual adjustments. Award to other than the current Lessor would require relocation of the entire mission and would cause FDA to incur move and replication costs that would not be recovered through competition. Within the current space, the agency has acquired the use on an existing building that has been greatly modified at the agency's expense in order to house personnel in office and laboratory space, conduct training, provide secured communications meet the requirements of housing personnel, training and provide secured communications within the Food and Drug Administration (FDA). Aside from requiring a sizeable built-to-suit walk in freezer, other amenities have been provided in maintaining the alertness of a FDA agents. The current building serves as a mini laboratory for a make-shift investigation unit that serves as a training scenario for future possible confrontational scenarios. The agency maintains a holding component to contain and secure violent strains of bacteria and germs from exposure to the general public while developing potential cures and vaccines. FDA must store their test subject food and drugs in a safe, humidity controlled environment. The current building has the concrete floor and steel walls that surround and secure the drugs and produce used in their mission. The safe requires separate Heating, Ventilation, and Air Conditioning (HVAC) to ensure the metal does not corrode or rust from exposure to the environment. The facility contains 82 laboratory vent hoods. REDACTED 5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICAL. On February 28, 2017, Craig Thomas (GSA LCO) conducted a visual market survey and could not identify any potentially acceptable locations that could satisfy the agency's requirements within the short time needed nor within the delineated area identified by the agency. GSA placed an advertisement 3GA0297 conforming to GSAM 570.402-2 on the Federal Business Opportunities Web site (fedbizopps.gov) on March 8, 2016 with a closing deadline of March 29, 2016 and received no expressions of interest other than from the incumbent. 6. DESCRIPTION OF MARKET RESEARCH CONDUCTED. On February 28, 2017, market research using REIS and Loopnet only a warehouse was identified. There is no other available laboratory type space available other than the incumbent location. 7. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION. In accordance with Federal Acquisition Regulation (FAR) 6.303-2(a) (7), the Contracting Officer determines by certifying in this document the anticipated total contract cost to the Government of $15,422,581.00 is fair and reasonable for the five (5) years; four (4) years firm term extension of Lease LGA46013. 8. LIST OF SOURCES THAT EXPRESSED INTEREST IN THE ACQUISITION - None 9. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION. Consistent with the Competition in Contracting Act, full and open competition will be undertaken in future requirements for Food and Drug Administration in Atlanta, GA, as future opportunities are available. 10. TECHNICAL REQUIREMENTS PERSONNEL CERTIFICATION I certify that the supporting space requirements data used to form the basis of this Justification is complete and accurate to the best of my knowledge and belief. 4/23/2018 X michael p monaghan Michael Monaghan Contracting Officer Signed by: MICHAEL MONAGHAN 11. CONTRACTING OFFICER CERTIFICATION AND DETERMINATION THE ANTICIPATED COST WILL BE FAIR AND REASONABLE. Market research for comparable properties conducted in Mid-Town Atlanta, Georgia, by Craig Thomas, Leasing Specialist, in Mid-town Atlanta, Georgia, yielded no results. The rental rates outside of the approved delineated area for quasi office warehouse/mixed use properties ranged from $25.00 to $29.50 per RSF excluding Operating and Tenant Improvement Allowances. There were insufficient comparables for laboratory/medical properties to evaluate. Therefore, taking into account the lack of available space and the extraordinary move and replication construction costs associated with laboratory construction, the rate of $42.71 per RSF for five (5) years quoted by the existing Lessor to the Government falls slightly above the market range; however, construction of specialized laboratory space, moving, and replication costs significantly offset any potential savings for the extension period which the Contracting Officer has determined to be fair and reasonable. 4/23/2018 X michael p monaghan Michael Monaghan Lease Contracting Officer Signed by: MICHAEL MONAGHAN Concurrence: X Maria Dent Deputy Director, Leasing (4PL1) X LaSonya Duncan-Glover Director, Leasing Division (4PR) Legal Review: X Benjamin Lorber Assistant Regional Counsel (LD4) Regional Competition Advocate: X Alecia Bonds Competition Advocate, PBS Region 4 ATTACHMENTS: 1) Senate Resolution Prospectus PGA-01-AT17 Approved 7/12/2017 2) House Resolution Prospectus PGA-01-AT17 Approved 12/7/2016 3) GSA Prospectus PGA-01-AT17 Approved 9/13/2016 Justification for Other Than Full and Open Competition ? Justification for Other Than Full and Open Competition