0DC2421 Redacted OTFO.pdf

Project No. 0DC2421 – Lease Extension at Gallery Place Page 1 of 5

U.S. GENERAL SERVICES ADMINISTRATION

NATIONAL CAPITAL REGION

OFFICE OF PORTFOLIO MANAGEMENT AND REAL ESTATE

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Estimated Contract Value: $6,964,350.00

1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED:

Project Number: 0DC2421 Lease Number: GS-11B-01825 Project Title: Lease Extension at Gallery Place Agency: Federal Bureau of Investigation (FBI)

The General Services Administration (GSA) currently leases 57,747 BOMA Rentable Square Feet (BRSF) of office and related space for the Federal Bureau of Investigation at Gallery Place, 616 H Street, NW, in Washington, DC under Lease No. GS-11B- 01825. The lease expires on September 25, 2020. GSA is seeking authority to negotiate a lease extension for 49,816 BRSF of the FBI’s space for up to two (2) years with termination rights after 12 months. Additionally, GSA is seeking authority negotiate a lease extension for the remaining 7,931 BRSF of space, which is a separately demised suite for polygraph testing, for a period of up to five (5) years with termination rights after three (3) years.

Due to circumstances outside of GSA’s control, the long-term succeeding lease procurement (Project No. 8DC2573) to accommodate FBI’s continuing housing need at Gallery Place was cancelled. After concluding negotiations for a 15 year succeeding Lease, the Lessor refused to sign the Lease citing plans to reposition the building.

Therefore, this additional lease term will provide FBI with adequate time to relocate all of the personnel from Gallery Place into space in FBI’s existing inventory.

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED:

FBI needs to maintain occupancy of 57,747 BRSF / 46,354 ABOASF of office and related space under Lease No. GS-11B-01825 at 616 H Street, NW, Washington, DC.

The primary occupant of this space is an FBI unit that directly supports FBI’s Washington Field Office (WFO). The extension term will provide continued occupancy for the FBI personnel housed at Gallery Place while FBI makes the necessary alterations to its existing inventory to relocate this tenant. FBI needs a longer extension term for the 7,931 BRSF suite because it contains specialized space that is difficult to replicate. GSA plans to negotiate rolling termination rights after three (3) years to provide FBI with maximum flexibility to terminate the extension when the new space in their existing inventory is ready for occupancy by the polygraph unit.

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The estimated maximum contract value for this lease extension is $6,964,350.00

Firm Term/Amortization Period for 49,816 BRSF: $50.00 rate/rsf x 49,816 rsf = $2,490,800.00 (Annual Rent) x 1 year = $2,490,800.00

Firm Term/Amortization Period for 7,931 BRSF: $50.00 rate/rsf x 7,931 rsf =

$396,550.00 (Annual Rent) x 3 years = $1,189,650.00

Non-Firm Term for 49,816 BRSF: $50.00 rate/rsf x 49,816 rsf = $2,490,800.00 (Annual Rent) x 1 year = $2,490,800.00

Non-Firm Term for 7,931 BRSF: $50.00 rate/rsf x 7,931 rsf = $396,550.00

(Annual Rent) x 2 years = $793,100.00

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 THE USE OF THE

AUTHORITY CITED:

GSAM 570.405(c)(2) provides authority to negotiate a short term lease extension in situations such as this where the Government requires additional time to prepare new space for occupancy. As discussed above, GSA successfully ran a succeeding lease procurement where the incumbent Lessor was named the Apparent Successful Offeror (ASO). However, the procurement did not result in award because the ASO rescinded their offer and was unwilling to execute the resulting Lease. FBI then confirmed that it could backfill this tenant into existing FBI controlled space. Therefore, a short-term extension is required to provide FBI with sufficient time to prepare its existing inventory and absorb this requirement. Accordingly, the Government will need an extension of up to five (5) years at Gallery Place from September 26, 2020 through September 25, 2025.

5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS

PRACTICABLE:

In accordance with GSAM 570.106(d), it is not appropriate or reasonable to publish an advance notice for supplemental lease agreements of real property involving lease extensions under the circumstances defined in GSAM 570.405(c)(2).

6. DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE:

In accordance with FAR 6.303-2 (b)(7), the Contracting Officer determines by certifying this document that the anticipated cost for the office space estimated under Section 2 of this document is considered fair and reasonable based on the following:

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Based on market research completed on August 14, 2020, the current rental rate range for buildings within the delineated area (Washington, DC CEA) is $48.00 per RSF to $76.00 per RSF with a market midpoint of $58.70 per RSF.

The current rental rate for the subject lease is $48.83 per RSF. The Contracting Officer anticipates that the rental rate for this extension will be at or within a reasonable range above the current rate.

The short term length of the extension with termination rights may command a premium, at or above the current rental rate.

In addition, every effort will be made by the Contracting Officer to negotiate the lowest possible rental rate for the required space.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS:

A CoStar survey was conducted on August 14, 2020 for rental rates with the CEA of Washington, DC. The market research identified 54 existing buildings within the delineated that could potentially satisfy the requirement. The current rental rate range for buildings within the delineated area is $48.00 per RSF to $76.00 per RSF with a market midpoint of $58.70 per RSF.

8. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN

COMPETITION:

This extension will allow for sufficient time for FBI to make the necessary adjustments to its existing inventory to move this tenant into existing backfill space controlled by FBI in other locations.

9. LIST OF SOURCES, IF ANY, THAT EXPRESSEDAN INTEREST IN THE

ACQUISITION:

Not applicable.

10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION:

Upon expiration of this extension, the existing lease will terminate and the occupants will move to backfill space which already exists within FBI’s inventory.

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11. PREPARER’S TECHNICAL CERTIFICATION:

I certify that the supporting data used to form the basis of this Justification is complete and accurate to the best of my knowledge and belief.

________________________________________ Date______________________ Jonathan Petix Realty Specialist

12. CONTRACTING OFFICER CERTIFICATION:

By signature on this Justification for Other than Full and Open Competition, the Contracting Officer certifies that the award of a lease extension for up to 60 months at 616 H Street, NW, Washington, DC is in the Government’s best interest and that this Justification is accurate and complete to the best of the GSA Lease Contracting Officer’s knowledge and belief.

__________________________________________ Date_____________________ Joel T. Berelson Lease Contracting Officer

Concurrence:

Aaron Gill Director, DOJ Client Delivery Division

____________________________________ Date______________________ Michael Klein Office of Regional Counsel

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Approval:

Miranda Webster Competition Advocate