1VA2291 Redacted JOTFOC.pdf

Justification for Other Than Full and Open Competition, Succeeding Lease

U.S. General Services Administration

GSA Region 11

Office of Real Estate Delivery/ Lease Execution Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 1VA2291

Agency Name: Internal Revenue Service (IRS)

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

The General Services Administration currently leases 10,673 ANSI/BOMA Office Area Square Feet (ABOA SF) / 11,739 rentable square feet (RSF) of office, laboratory, and related space at 3020 Noble Pond Way, Woodbridge, VA under lease number LVA12608 for the Internal Revenue Service (IRS). The current lease expires November 20, 2024. The IRS criminal Investigation Unit (CI) occupies the space under this lease. This specialized unit focuses on three independent programs; tax crimes, financial crimes, and narcotics related/counterterrorism financial crimes. IRS CI has made a considerable investment into its current laboratory space, which comprises approximately 3,000 RSF of the existing leased space. IRS has a continuing need for the space as well as a mission related need to be located within the previously approved restricted delineated area (further described below) as it provides close proximity to the dark fiber line necessary for the IRS’s cyber security requirements. Approval is requested to negotiate a succeeding lease with the incumbent Lessor without full and open competition for continued occupancy at this leased location. The procedures for pursuing a succeeding lease are detailed in 48 CFR 570.402: Succeeding Leases (GSAR 570.402).

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS

(INCLUDING ESTIMATED VALUE).

IRS submitted a continuing need letter on May 17, 2022 for 10,673 ABOA SF of office, laboratory, and related space. To satisfy the IRS mission requirements, offered space must be contiguous, above grade space, located in one suite.

This requirement is for 10,673 ABOA SF / 11,739 RSF of space for a 10-year term to commence on November 21, 2024. The estimated cost of this lease is $32.00 per RSF per year for an annual cost of $375,648.00 and a total contract value of $3,569,656.00 after accounting for anticipated market concessions of approximately 6 months of rent abatement. There is no vacant Federal Space available that fits this need.

The delineated area is:

Northern Boundary: Fairfax County Pkwy (Rt 286 east) to Richmond Hwy/ US1

Eastern Boundary: Richmond Hwy/ US1 (south) to Dale Blvd

Southern Boundary: Dale Blvd (west) to Minnieville Rd.

Revised 12-06-2022

Western Boundary: Minnieville Rd (north/east) to Old Bridge Road, east along Old Bridge Road to Ox Road (Rt 123), north/west along Ox Road to Lee Chapel Road, north along Lee Chapel Road to Fairfax County Parkway (Rt 286).

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 570.402-1(b), use of the sole source authority is appropriate where it is determined either that (1) there are no other potential acceptable locations; or (2) award to any other offeror would result in substantial duplication of costs to the Government that are not expected to be recovered through competition.

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

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

GSAR 570.402-1(b)(1) applies in this case and allows for negotiation with the incumbent Lessor when no other potential acceptable locations are identified through the advertisement or the market survey. As is discussed in more detail below, based on market research and responses to the SAM advertisement, GSA has identified only one source, the incumbent location, that can satisfy the Government’s space requirement.

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, the GSA Lease Contracting Officer placed an advertisement on the Contracting Opportunities domain of SAM.gov on January 25, 2023 for 15 days. In addition, GSA’s broker conducted market research using CoStar and responded to telephone inquiries about the space requirement from building owners and landlord representatives. Despite active market engagement, GSA received only one responsive expression of interest, which came from representatives for the incumbent location at 3320 Noble Pond Way, Woodbridge, VA.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

Market surveys conducted on October 11, 2022 and March 3, 2023 in Woodbridge, VA showed the rental rate ranges from $26.50 to $36.00 per RSF, according to data with CoStar Group, which is attached hereto as Exhibit A. The proposed rental rate for this succeeding lease of $32.00 per RSF, plus 6 months of anticipated rent abatement, equates to a net effective rate of $30.40 per RSF. This is within the current market range for the delineated area and is deemed fair and reasonable by the GSA Lease Contracting Officer. GSA will work to negotiate this rate even lower.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On March 3, 2023, market research using CoStar identified 11 potentially acceptable locations, including the incumbent that might meet the agency’s needs within the delineated area. Full service rental rates ranged from $26.50 per RSF to $36.00 per RSF with a market midpoint of $31.25 per RSF. However, upon PBS posting an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on January 25, 2023, only one expression of interest was received, from the incumbent Lessor. The incumbent Lessor’s expression of interest indicated that the net effective rate would be $30.40 per RSF ($32.00 per RSF with 6 months of rent abatement).

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

There are no concerns or deficiencies identified for the current Lessor’s past performance, and property inspections have shown the space to be well maintained and in good condition.

9. LIST OF SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE

ACQUISITION.

3320 Noble Pond Way, Woodbridge, VA (incumbent Lessor)

10. STATEMENT OF ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME

ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

There are no systemic barriers to competition. If the agency has a continuing need for space upon lease expiration, GSA will follow all authorities, regulations and policies applicable to lease acquisition. Should there be remaining useful life in the Government’s tenant improvements, the Government will consider the cost of moving from the existing location and the cost to build out new space when deciding whether to undergo a competitive action.

Additionally, objective scrutiny will be given to the customer agency’s mission and security requirements (if applicable) to eliminate unnecessary agency space requirements that may be deemed unduly restrictive.

11. CONTRACTING OFFICER CERTIFICATION.

By signature on this Justification for Other than Full and Open Competition, the GSA Lease Contracting Officer certifies that the award of a succeeding lease of 11,739 RSF 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_____________________ Kevin Morrison, Lease Contracting Officer

12. 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 3/8/2023 Bryant Porter, GLS Plus Broker (Savills Inc.)

Concurrences:

___________________________________________________ Date______________________ Glenn Harvey, Director, Lease Execution Division

___________________________________________________ Date______________________ Zach Villemez, Office of the Regional Council

Approved by:

___________________________________________________ Date______________________ Michael Spriggs, Competition Advocate