X--Succeeding Lease Suite 200

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION, SUCCEEDING LEASE DEPARTMENT OF VETERANS AFFAIRS VISN 19 Rocky Mountain Network Contracting Center 4100 E. Mississippi Avenue, Suite 200 Glendale, CO 80246 Lease Number: VA259-14-L-0119 Suite 200, Mountain Towers GREX Number: DCO04132 Upon the basis of the following justification, the use of other than full and open competition for the proposed contractual action is hereby approved pursuant to the authority of 41 U.S.C. 253(c)(1), and FAR 6.302-1, which states, "Each justification shall contain sufficient facts and rational to justify the use of the specific authority cited. As a minimum, each justification shall include the following information:" Only one responsible source and no other supplies or services will satisfy agency requirements. JUSTIFICATION 1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED. The VISN 19 and Rocky Mountain Acquisition Center (RMAC), currently leases 10,871 Net Useable Square Feet (NUSF) at 4100 E. Mississippi Avenue, Glendale, CO 80246 under lease number V259-R-0149. The current lease expired 10 Aug 2014 and has a standstill agreement in place reflecting current guidance from the VA. Delegation from GSA for this action has been received. Approval is requested to negotiate a succeeding lease with the incumbent lessor without full and open competition for continued occupancy at this leased location. 2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED. VISN 19 and the RMAC proposes to enter into a sole source acquisition with Mountain Towers Properties, LLC, for the purpose of acquiring 10,871 net useable square feet of office/administration space at Mountain Towers located at suite #200, 4100 East Mississippi Avenue, Glendale, CO 80246. Lease will be negotiated sole source based on most efficient organization criteria and as such, there is only one responsible source and no other supplies or services will satisfy agency requirements, therefore, full and open competition is determined inappropriate for this acquisition. The estimated average annual rental cost is $ 139,150.11 yearly average cost $ 12.80 per RSF 3. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED. This space is required to accommodate the VISN 19 Leadership and Staff through 2019. The organization currently leases space in the facility, but the movement and disruption of operations by relocating to other leased space would adversely impact the efficiency and operations of the VISN-19 leadership. This acquisition is below the threshold for action at the VACO Real Property Services level. The lease will be negotiated for a five-year, firm fixed-price term with five (5) non-firm years for a total of ten years and will not exceed this lease term. The estimated rental rate will be $20,283.13 per month for a total annual rental rate of $244,597.50 or $22.50 per square foot "fully serviceable." The un-serviced amount is estimated at $139,150.11. This qualifies this acquisition as a simplified lease action. 4. IDENTIFICATION OF STATUTORY AUTHORITY. 41 U.S.C. 253(c)(1): Only One Responsible Source and no Other Supplies or Services will Satisfy Agency Requirements. 5. DEMONSTRATION THAT THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED. GSAM 570.402-5 allows for negotiation with the incumbent Lessor when a cost-benefit analysis shows that the Government cannot expect to recover relocation and duplication costs through competition. It is the determination of the Contracting Officer that this particular lessor is in very unique position based on the Lease Market Analysis (see contract file) conducted to determine the VA's most efficient method of acquiring a lease for general office space. This study was conducted to determine the economics of negotiating a sole source agreement with the current landlord verses issuing a solicitation for full and open competition. VISN 19 has a requirement for 10,871 square feet of space to accommodate this group of VISN-19 Leadership and support staff. The building owned and operated by Mountain Towers Properties is a 19-story building, newly constructed in 1984, located within a prime real estate business district of Denver, Colorado, and is very accessible in all directions. In conducting the lease market analysis, the Contracting Officer looked at very key elements in order to make a sound and reasonable determination as to the VISN's most efficient method of acquisition. These areas of consideration include; (1) Responses to Space Requirement Announcement, (2) Location/Condition of Building and Offerors Compliance with Space Requirements, (3) Price Per Square Foot and Anticipated Build-Out Costs, and (4) Relocation Costs and Benefits. Based on review of the above noted elements, it was determined that there would be a cost savings of approximately $297,370.00 reflected in build-out, moving cost and re-establishment of IT/Data telecommunication services. Based on the savings reflected above it was determined that the most efficient method for this acquisition would be to conduct sole source negotiations with the current landlord as full and open competition is shown not economical to the Government. A market survey was conducted and revealed that this facility is the best property that meets our existing needs. Some of the advantages for leasing this space include: the data connectivity costs are minimal ($2,500.00) as opposed to what it would cost at another location ($25,000); no build-out costs; no moving expenses; reasonable rates and low utility costs, on-site maintenance and close proximity to the Denver VAMC. Advertisements were not placed in local papers or FBO for the original SFO. No inquiries from other property management firms were received. . It is the determination of the Government that soliciting full and open competition for procurement of this space would not be advantageous to the Government and would create unnecessary hardships and delays. Cost Benefit Analysis REDACTED 6. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICAL. Market research identified no potential locations that would be acceptable given the criteria and costs. An advertisement on the Federal Business Opportunities Web site (fedbizopps.gov) conforming to GSAM 570.402-2 was posted on Apr 4, 2014 there were zero expressions of interest. . 7. DESCRIPTION OF MARKET RESEARCH CONDUCTED. A lease market survey was conducted by the contracting officer for the purpose of determining the economic value of relocating the VISN office using competitive procedures verses the savings that may be obtained should the VISN negotiate sole source with the current landlord. The overall findings of this analysis show that the Government should save approximately $258,370.00 by negotiating a sole source agreement with the current landlord. The service concludes that there are anticipated savings of approximately $200,000.00 in tenant-improvement allowance, $33,370.00 in moving charges and $25,000.00 for the relocation of telecommunication service. Based on the market survey, it was determined that it in the best interest of the Government to negotiate sole source with the current landlord for the space already occupied by the Government. The VA has checked with local lessors and other property management companies to establish the going rate for leased space ranged between $18.00 and $29.00 per rentable square foot. In addition, lease rates were obtained via internet web sites that reflected like property lease rates were between $19.00 and $30.00 per rentable square foot. Also, a market survey worksheet was prepared and attached. 8. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION. Additional factors supporting the use of other than full and open competition, is the fact that there are supplementary savings that will be realized by the Government through sole source negotiation with Mountain Towers Properties. Under the terms of the new lease, VISN 19 has negotiated the rental cost for all leased space at Mountain Towers to be the same as all the other leased space. In addition, the annual increases are consistent with the anticipated Consumer Price Index. The leases will include the current directed Termination clause. As such, VISN 19 has a requirement to re-establish a lease immediately and will be able to do so by re-negotiating the current lease and replacing it with a new lease. The property management office is located in the same building the VISN 19 and ECHCS offices are located and offer prompt on-site maintenance. Attachment 1 - P02 - Market Research Summary - Ste 200 succeeding Attachment 2 - Mt Towers Ste 200 Lease Market Survey Attachment 3 - Request for succeeding lease - Ste 200 9. LIST OF SOURCES THAT EXPRESSED INTEREST IN THE ACQUISITION. Mountain Towers Properties, LLC 4100 E. Mississippi Ave Glendale, CO 80246 +1 (555) 000-0000 - Direct +1 (555) 000-0000 - Fax Attention: John Miller 10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION. Not applicable. . 11. Certifications. TECHNICAL AND REQUIREMENTS PERSONNEL CERTIFICATIONS (FAR 6.303-2(b): I certify that this justification with supporting data is complete and accurate. Technical Personnel Certification: _________________________ REDACTED _____ REDACTED Phone Date CONTRACTING OFFICER I certify that this justification is accurate and complete to the best of my knowledge and belief. __________________________ REDACTED _______ REDACTED Date