DOS_1VA2112_-_OTFO_-_Approved_Redacted.pdf

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U.S. General Services Administration

National Capital Region

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NUMBER: GS-1IB-01433

PROJECT NUMBER: IVA21 12

AGENCY NAME: Department of State, Bureau of Diplomatic Security

ADDRESS: 1801 North Lynn Street, Arlington, Virginia

1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED.

The General Services Administration (GSA) currently leases 343,311 Rentable Square Feet (RSF), yielding 308,748 ANSI BOMA Office Area square feet (ABOA) at 1801 North Lynn Street, Arlington, Virginia 22209 under lease number GS-1 1B-01433 for the Department of State, Bureau of Diplomatic Security (OS). OS occupies the entire building. The current lease expires June 30, 2013. This location serves as the OS Headquarters and houses the DS worldwide command center, a state-of-the-art facility that provides real time capability to monitor the physical security of virtually all U.S.

missions overseas.

GSA issued Request for Lease Proposals (RLP) Number 1VA21 12 on April 25, 2012, seeking approximately 308,000 ABOA square feet under a full and open competition procurement. After the RLP was issued, DOS re-evaluated the fundamental space needs for DS Headquarters. In a letter dated December 18, 2012, DOS asked GSA to cancel the lease procurement based on DOS’ reassessment of its needs and an internal decision to house OS in federally-owned space. GSA cancelled the lease procurement on December 26, 2012. We have concluded that a 5-year extension of the current lease, in which we would also seek termination rights, will be needed to provide sufficient time for the Government to pursue a federally-owned solution.

Approval is requested to negotiate an extension of the existing lease with the incumbent lessor without full and open competition for continued occupancy at this leased location for a term not to exceed five years.

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED,

The United States Department of State requires continued occupancy of the incumbent location at 1801 N. Lynn Street for no more than five (5) years. This requirement is for 343,311 RSF of space yielding 308,748 ABOA square feet, resulting in a utilization rate of approximately 130 usable square feet per person. The required lease term is for five

(5) years, with possible termination rights, to commence any time after July 1, 2013. The five (5) year term is needed so that the Government may maximize the number of potential ownership alternatives (purchase and construction), and the termination option

Justification for Other Than Full and Open Competition fl

C] will provide maximum flexibility to the Government if a solution is found earlier. The delineated area of the incumbent building is Rosslyn, Virginia. The estimated annual cost of this lease extension is up to $58.00 per RSF, full service, per year for an annual cost of $19,91 2,038,00 for the first year and a total contract value of $99,560,190.00.

This anticipated cost is based on the following: the initial offer that was received by the incumbent lessor in the competitive 15-year procurement; market knowledge; recent market comparables; and the need for a shorter term than is desirous for the lessor.

These factors combine to drive the rate to a top-of-market level. We also anticipate that the rates in the current lease for parking, storage and roof access will be increased. The NCR negotiating team will use every effort to reach a rate below $58.00.

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.

In accordance with GSAM 570,405, a lease extension without full and open competition is appropriate where, as in this instance, the Government has made a fundamental change in the type’of space required by the agency and requires additional time at the incumbent location to move into other federally controlled space. Since DOS has determined that the DS Headquarters location needs to be in a federally owned facility, it is in the Government’s best interest to extend the lease at the incumbent location while a federally owned facility is acquired or constructed.

5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICABLE:

In accordance with GSAM 570.106(d), no advertisement was placed for this requirement as the contracting officer need not advertise the proposed acquisition of a lease extension under the conditions defined in GSAM 570.405.

6. DEMONSTRATION THAT THE ANTICIPATED COST WILL BE FAIR AND

REASONABLE:

Recent market research conducted by CBRE, Inc. in the Rosslyn/Ballston corridor, Virginia, for comparable properties showed that the rental rate within the delineated area for those properties ranges from $40.00 to $64.00 per RSF, full service. For the reasons indicated above, we expect to pay a premium for this short-term extension.

The cost anticipated at the existing location is up to $58.00 per RSF, full service, with a minimal tenant improvement allowance. Lower negotiation objectives will be established, however, and good faith efforts, combined with extensive market knowledge and experience, will be used to reduce this anticipated rate.

Therefore, the rate quoted by the incumbent falls within the market range found through the market research. The Rosslyn office market is consistently one of the strongest n markets in the Washington, DC, area, with an average Class A asking rental rate of $52.35 per RSF. Furthermore, the incumbent building is a Class ’A’, trophy building, with outstanding views and other features that contribute to a premium rental rate in this market. In addition to premiums associated with a short-term extension, there are few large blocks of available space in Rosslyn, a fact that pushes the market rents to a range of from $50.00 to $65.00 per rentable square foot (see paragraph 7 below). In addition, because of unique requirements related to the DS Command Center, and extensive equipment upgrades to the space, the incumbent building is the only property that can meet the agency’s requirements. For all these reasons, the Contracting Officer determines that the anticipated cost to the Government of up to $58.00 per RSF, full service, for the entire requirement is fair and reasonable.

7. MARKET RESEARCH CONDUCTED.

Recent market research conducted by CBRE, Inc. in the Rosslyn/Ballston Corridor of Virginia for comparable properties showed that the rental rate within the delineated area for those properties ranges from $55.00 to $64.00 per RSF, full service. The following properties were the only two available in the requisite delineated area with the requisite square footage:

Address Rental Rate per BRSF

Other lease comparables in the Ross lyn/Ballston corridor for smaller blocks of space show a rental rate between $40.00 and $60.00 per RSF.

Tenant Address SF Rental Rate Execution Term

Concessions per RSF Date (years)

S .

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

COMPETITION.

Significant move and replication costs for this requirement, which have been thoroughly vetted by GSA and shared with OMB, would be required in order to replicate the Command Center and other office space at any new location.

9. LIST OF SOURCES THAT EXPRESSED INTEREST IN THE ACQUISITION.

None.

10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION.

At the expiration of this lease extension, GSA anticipates that the tenant will be moving to federally-owned space and will have no further need for this leased location.

11. 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.

Date I

Gary R. Arabak Lease Contracting Specialist (WPRA)

12. CONTRACTING OFFICER CERTIFICATION ANDDETERMINATIONTHAT THE

ANTICIPATED COST WILLBEFAIR AND REASONABLE.

By signature on this justification for Other than Full and Open Competition, the Contracting Officer certifies that award of an extension of up to five (5) years with possible termination rights for 343,311 RSF at 1801 N. Lynn Street, Arlington, VA is in the Gqyernment’s best interest apd i accurate and complete to the best of my know dge a d belief. /1

Date__________

Santoni W. Graham Lease Contracting Officer (WPRA)

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Concurrence:

Date ~ it ( I Monica Sias Director Lease Executions Division (WPRA) iL 4ATh Date Victoria Hartke Acting Director Office of Leasing (WP)

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Date 1(��’ I ’-

Paula DeMuth Regional Counsel (WL)

Date

Melanie Lewis Competition Advocate (WPGQ)

Date______

Bill Dowd Acting Regional Commissioner (WP)

Approval:

Date 14’c 2o/7

Iph Neurauter ior Procurement Executive (M1V)