0CO2374_JOTFOC_9.21.23 - Final_Redacted.pdf

DocuSign Envelope ID: 67F771B5-0148-494E-8026-E223B9D42BA5

Justification for Other Than Full and Open Competition, Succeeding Lease

U.S. General Services Administration

GSA Region 8

Leasing Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 0CO2374

Agency Name: Immigration and Customs Enforcement (ICE)

1. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED.

The General Services Administration currently leases 47,763 ABOA / 54,927 rentable square feet (RSF) of office space for ICE at the Jim Bailey Building, 12445 E Caley Ave, Centennial, CO 80111 under lease number LCO14148. The current lease expires August 31, 2024. This action is for 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 TO MEET THE AGENCY’S NEEDS

(INCLUDING ESTIMATED VALUE).

ICE submitted a continuing need letter on June 10, 2021, for 47,763 rentable square feet of office and related space.

This requirement is for 47,763 ABOA / 54,927 RSF of space for a ten (10) year firm term with two five (5) year option terms to commence on September 1, 2024. The estimated cost of this lease is $44.00 per RSF per year for an annual cost of $2,416,788.00 and a total contract value of $48,335,760.00 (inclusive of option terms). The delineated area (DA) is the city limits of Centennial, CO.

There is no vacant Federal Space available.

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 570.402. In accordance with GSAR 570.402, use of the sole source authority is appropriate where, among other things, the Contracting Officer does not identify any potential acceptable locations through the advertisement or the market survey.

4. DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR

NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED.

This proposed succeeding lease action was advertised via a pre-solicitation notice that was placed on the Contracting Opportunities domain of SAM.gov on August 16, 2023 for ten days which resulted in one expression of interest from the incumbent Lessor. Since no other expressions of interest, besides the incumbent Lessor, were received, GSA, through its broker (CRCRE), conducted market research using CoStar and by contacting brokers that work within the DA. While three other parties were advertising

DocuSign Envelope ID: 67F771B5-0148-494E-8026-E223B9D42BA5 buildings with enough space to accommodate ICE’s size requirement, it was determined that they could not meet the Governments deadline to occupy the space by September 1, 2024, because of the buildout requirements of ICE. The incumbent Lessor’s space already meets the ICE buildout requirements (as explained further below) and the space is ready for occupancy on the needed date. As a result, they were determined to not be potentially acceptable locations and therefore a cost benefit analysis is not required per GSAR 570.402-6. The advertisement results demonstrate that the incumbent lessor is uniquely qualified to meet ICE’s requirements.

The incumbent Lessor offering the current location is uniquely qualified to meet ICE’s requirements for another reason. Award to other than the current Lessor would require relocation of the entire requirement and would cause ICE to incur move and replication costs such as buildout that would not be recovered through competition. Such a relocation would almost certainly not be able to meet ICE’s requirement for delivery of the space. Relocation costs are estimated to be $492,971.00. Additionally, remaining in the incumbent’s space allows the Government to make use of existing tenant improvements and special use space, avoiding replication costs of $17,645,516.00. Special use space includes buildout for modified HVAC systems, FSL III build-out, wire mesh and ballistic materials for secure rooms and extensive building permitter security.

While not required under GSAR 570.402-5, a cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6. Based on market research cited in paragraph 6 below, the estimated cost of relocating ICE exceeds the proposed cost of remaining at 12445 E Caley Ave, Centennial CO, 80111. The total savings to the Government is between $5,899,937.00 and $9,236,392.00 by remaining in the incumbent’s space.

5. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

Per the requirements of GSAR 570.402, CRCRE placed a pre-solicitation notice on the Contracting Opportunities domain of SAM.gov on August 16, 2023, for ten days. In addition, CRCRE conducted market research using CoStar and by contacting brokers that work within the DA.

6. DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market research conducted by CRCRE for Centennial, CO showed fully serviced rental rates within the delineated area ranging for the market from $28.00 - $30.50 per RSF with 2% annual escalations to be expected over the term of the lease. This research was based on CoStar data and discussions with real estate brokers that work within the DA. By applying the 2% annual escalations over the potential 20-year full term and averaging the results, the levelized rental rate range equates to $34.02

- $37.05 per RSF.

The proposed rental rate received from the incumbent Lessor as part of their expression of interest was $44.00/RSF flat for a 10-year firm and two (2) 5-year options. While this rate is above the high end of the calculated market range, the rates in the market range do not reflect buildout and other replication costs.

If they did reflect these costs, these rates would be much higher than the expected rate of the incumbent Lessor. Also, the incumbent Lessor’s rate is estimated to provide an overall cost savings to the Government between $5,899,937.00 and $9,236,392.00 and is therefore deemed fair and reasonable by the GSA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On July 24, 2023, CRCRE conducted market research using CoStar and identified three potentially acceptable locations plus the incumbent that might meet the agency’s needs within the DA. The potentially acceptable locations are all Class A office space and have the required 47,763 ABOA space.

In addition, CRCRE posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on August 16, 2023. There were no expressions of interest