Award Notice

LEASE EXTENSION JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION LEASE NUMBER: L99PL00038 DELEGATION NO.: DUT03636-001 LOCATION: Cedar City, UT Agency Name: Bureau of Land Management (BLM) 1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED. The Bureau of Land Management (BLM) Contracting officer proposes to enter into a contract on a basis of other than full and open competition for continued occupancy of leased space located in Cedar City, Utah. The BLM currently occupies a total of 20,729 rentable square feet (rsf)/ 18,025 usable square feet (usf) of quality office and related space consisting of 13,398 rsf/ 11,650 usf of office space, 7331 rsf/ 6,375 usf of warehouse space, and 80,000 square feet (sf) of wareyard space located at 176 East D.L. Sargent Dr, Cedar City, UT. This lease was originally created to satisfy the space needs of the Cedar City Field Office. The current lease expired on October 5, 2014. The lease extension will provide General Services Administration (GSA)-Public Building Systems (PBS), Region 8 ample time to complete a new lease acquisition as well as build out necessary tenant improvements. Region 8 is anticipating occupancy by the beginning of Fiscal Year (FY) 2017. Delegated authority was requested by BLM and subsequently granted by GSA to allow BLM to acquire a lease extension of a five (5) year term ending October 5, 2019 with a firm term of one (1) year. 2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED. Approval has been granted by GSA to allow BLM to enter into a sole source lease extension with the incumbent landlord without full and open competition for continued occupancy. The BLM has a continuing need for 20,729 rsf/ 18,025 usf of office and related space and 80,000 sf of wareyard space located in Cedar City, Utah, under BLM's delegated lease authority, lease number L99PL00038. Delegated authority was requested by BLM and subsequently granted by GSA to allow BLM to acquire a lease extension of a five (5) year term ending October 5, 2019 with a firm term of one (1) year. GSA-PBS requests that new space requests be submitted 24-36 months in advance of a space need. Unfortunately, BLM did not have the staff to support requirements development for this location until recently. BLM is in the process of developing the complete Agency Specific Requirements (ASR) package for the space need located in Cedar City, Utah and will provide GSA the complete ASR once complete. It is anticipated BLM will provide GSA the ASR within the next 12-24 months. With the expiration of the lease, a five (5) year term ending October 5, 2019 with a firm term of one (1) year extension is needed to provide GSA-PBS ample time to procure a long term lease acquisition as well as build out necessary tenant improvements. If GSA-PBS, Region 8 is able to complete the lease acquisition earlier than three years, the non-firm term will allow the government to terminate lease number L99PL00038 upon sixty (60) days written notice to the lessor. 3. IDENTIFICATION OF STATUTORY AUTHORITY. 41 USC 3304 (a) (1): Use of noncompetitive procedures, GSAM 570.405 (c)(1): Lease Extensions and FAR 6.302-1: Only one responsible source and no other supplies or services will satisfy agency requirements. 4. DEMONSTRATION THAT THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED. GSAM 570.405 (c)(1) provides the tenant agency the authority the use of noncompetitive procedures when the property or service needed by the agency are available from only one reasonable source and no other type of property or services will satisfy the need of the agency. This lease authority applies to lease extensions in situations where the Government encounters unexpected delays outside of its control in acquiring replacement space. The BLM currently occupies space within the incumbent lessor's building which meets all BLM's space needs in Cedar City, UT. No other alternative locations are available which would meet the short term space needs of BLM. The duplication of cost to build out new space which would meet the agency's specific need for the short term is estimated in excess of $1.5 million. This could be a potential waste to the taxpayer as the cost would be duplicative and the government could not expect to recover the cost over the short term lease. The rental rate BLM is currently paying is below market rate and does not include a tenant improvement component that would be required in alternate space. The delineated area is within the city limits of Cedar City, UT. 5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICAL. On August 14, 2014, the Contracting Officer, conducted a preliminary market analysis and identified zero (0) existing buildings which would accommodate 20,729 rsf on continuous office and warehouse space and 80,000 sf wareyard space on a short term basis. On January 6, 2015, an advertisement was submitted on Fedbizops and zero (0) interested parties responded to the advertisement other than the current Offeror. In addition, the Realty Specialist contacted local brokers and conducted market research to identify locations which would meet the tenant agency's needs. Zero (0) properties available for lease exist in the Cedar City, UT area which meet the short term space need of contiguous office and related space equivalent to the size of the Subject Property. 6. DEMONSTRATION THAT THE ANTICIPATED COST WILL BE FAIR AND REASONABLE. In accordance with Federal Acquisition Regulation (FAR) 6.303-2(a) (7), the Contracting Officer determines by certifying this document that the anticipated cost to the Government of $4.20/SF NNN to $25.00/SF NNN per rentable square foot is fair and reasonable. Based on a comparison of the characteristics (as described below) of the incumbent property to the market, the market range is between $4.20 NNN to $25.00 NNN per rentable square. These properties do not accommodate the 20,729 rsf on continuous office and warehouse space and 80,000 sf wareyard space on a short term basis as required by this procurement. Address Fully Serviced Space Available Per RSF State Road 130 and I-15 N 440,000 $25.00 912 N Airport Rd N 18,600 $4.90 2002 N Main N 3,996 $12.60 1233 S Sage Dr N 6,320 $16.80 1450 W Industrial Rd N 9,388 $4.20 1190 Sage Dr N 6,966 $12.00 301 S Main St N 6,283 $5.73 370 East 800 North N 4,570 $12.87 BLM market research of GSA-PBS owned and leased inventory confirmed GSA-PBS has approximately six (6) lease contracts and zero (0) federally owned facilities in Cedar City, UT. These properties do not accommodate the 20,729 rsf on continuous office and warehouse space and 80,000 sf wareyard space on a short term basis as required by this procurement. The GSA-PBS properties are at full service rental rates of $8.04 sf and $24.35 sf. Address Lease Effective Latest Action affecting Term Fully Serviced Lease Agreement RSF Current Annual Rent Per RSF 2390 W HWY 56 2/1/2014 Succeeding Y 5532.94 $68,676.24 $12.41 2390 W HWY 56 6/1/2013 New Y 1460.16 $17,883.3 $12.24 2560 AVIATION WAY 11/1/2010 Succeeding Y 703 $6,052.92 $8.06 425 NORTH 2150 WEST, SUITE 4 9/21/2010 New/Replacing Y 3468 $69,195.86 $19.95 1223 N AIRPORT RD 12/1/2011 New/Replacing Y 11388 $277,386.00 $24.35 2069 N MAIN ST 8/15/2011 New/Replacing Y 1433 $34,712.09 $24.22 7. DESCRIPTION OF MARKET SURVEY CONDUCTED. On August 14, 2014, the Contracting Officer, conducted a preliminary market analysis and identified zero (0) existing buildings which would accommodate 20,729 rsf on continuous office and warehouse space and 80,000 sf wareyard space on a short term basis. On January 6, 2015, an advertisement was submitted on Fedbizops and zero (0) interested parties responded to the advertisement other than the current Offeror. In addition, the Realty Specialist contacted local brokers and conducted market research to identify locations which would meet the tenant agency's needs. Zero (0) properties available for lease exist in the Cedar City, UT area which meet the short term space need of contiguous office and related space equivalent to the size of the Subject Property. 8. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION. Award to other than the current Lessor would require relocation of the entire real property requirement and would cause the Cedar City, Utah Field Office to incur physical move, administrative, tenant improvement, and security expenses which would not be recovered by a competitive procurement. It is estimated, an expense of $57,162.75 would be incurred for the physical move, $57,004.75 for the voice and data move, and an estimated tenant finish cost of $1,385,832.50 would be required to bring - vanilla office space to the BLM space standards. These costs would not be incurred if the tenants remained at the current location until after GSA has procured a permanent long term lease. 9. LIST OF SOURCES THAT EXPRESSED INTEREST IN THE ACQUSITION. Zero (0) interested parties responded to the fedbizops.gov advertisement other than the current Lessor. 10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION. BLM has officially notified GSA-PBS Region 8 new lease procurement will be required for the BLM Cedar City, Utah office. Region 8 will be able to commence with the acquisition once BLM provides the updated ASR package per GSA's direction. 11. CERTIFICATIONS AND APPROVAL. By signature on this Justification for Other than Full and Open Competition, the Contracting Officer certifies that the award of a lease extension of 20,729 rsf/ 18,025 usf of office and related space consisting of 13,397 rsf/ 11,650 usf of quality office space, 7,332 rsf/ 6,375 usf of warehouse space and 80,000 sf located in Cedar City, Utah is in the Government's best interest and that this justification is accurate and complete to the best of my knowledge and belief. Prepared by: _______________________________ Date_February 18, 2015___ Sylvia Marquez, Realty Specialist Concurred by:_______________________________ Date_______________ Terry L. Baker, Contracting Officer Approval: ______________________________________ Date_____________________ Carol Hooper, Branch Chief, National Property and Support, National Operations Center