1WI2129 RHS Stevens Point JOTFOC - Redacted.pdf

GENERAL SERVICES ADMINISTRATION

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NUMBER GS-05B-18592

PROJECT NUMBER 1WI2129

5417 Clem’s Way Stevens Point, WI 54481

RURAL HOUSING SERVICES

This request for approval is submitted in accordance with FAR 6.304(2) and GSAM 570.401 Lease Renewal.

1. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED

The General Services Administration currently leases 15,843 rentable square feet (RSF) / 14,900 ABOA of office space at 5417 Clem’s Way, Stevens Point, WI 54481 under lease number GS-05B-18592 for Rural Housing Services (USDA-RHS). The current lease expires September 30, 2022. Approval is being requested to exercise the renewal option to enable continued occupancy at this leased location.

In order to comply with the PBS Commissioner’s initiative to save taxpayer dollars through rental savings we have been prioritizing our procurements based on the overall value of the contract and the potential for rental savings. In situations where the space currently occupied has been confirmed by the GSA Property Manager to be capable of meeting the government's continued needs, Region 5 decided to incorporate five year unevaluated renewal options into some leases. We now have determined, following the procedures described in 570.401 that exercising this renewal option is in the best interest of the government. Moving actions forward through renewals will allow the region to focus on deals with higher financial impact, realign our expiring workload in a phased manner and realize the organization's goal of longer term strategic planning.

At this time, we have also not received long term requirements from the agency but expect to receive them early in this renewal period so a long term housing solution can be completed by the expiration of this renewal. A lease renewal would also allow the government to be housed at a pre negotiated fair market rate while accommodating the tenant agency for the next five (5) years.

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

NEEDS (INCLUDING ESTIMATED VALUE).

RHS is currently located at 5417 Clem’s Way, Stevens Point, WI 54481 under lease number GS-05B-18592 for 15,843 rentable square feet (RSF) / 14,900 ABOA of office space. This 10 year, 5 year firm term is due to expire on September 30, 2022. RHS has expressed to GSA a continuing need for the space and their satisfaction with the current location. In order to meet the agency’s ongoing mission it was determined that a renewal option be incorporated into the lease. GSA in Region 5 has been faced with agency delays in providing requirements for long term procurements for years creating delays in our ability to address agencies longer term space needs timely. Exercising such a renewal of this lease for 5 years commencing on October

1, 2022 is negotiated to be $ per rental square foot for the first year of the renewal and a total cost of $ for the 5 year renewal.

3. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND

OPEN COMPETITION.

41 U.S.C. 253 (c) (1)

4. DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS

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

Following the procedure described in 570.401 it was determined that it would be cost prohibitive and not in the best interest of the government to move the agency for the term of this renewal.

The cost to replicate the tenant improvements and move the agency would be approximately per rentable square foot or $ total. This is prior to considering the new rental rate or operating costs. This figure is derived from GSA’s tenant improvement allowance calculator which uses the agency, its location, and total square footage to arrive at the number.

Moving the agency building to building would cost approximately $ . This figure comes from GSA’s Succeeding Lease Analysis Tool.

The current space is capable of meeting the agencies current mission needs for the term of this renewal and can be extended without the expenditure of replication cost. Expending the funds to replicate space to be used for only 5 years would be a waste of taxpayer dollars and is not in the best interest of the government. It is GSAs intention to finalize a long-term follow on procurement concurrent to the expiration of this proposed renewal term.

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

AS MANY POTENTIAL SOURCES AS IS PRACTICABLE.

After discussion with the GSA Property Management office, it was confirmed that the location is acceptable to meet the housing needs of the agency for the renewal period. With that additional information it has been determined that exercising the renewal is in the best interest of the government and therefore no additional sources were contacted. The long term procurement to be conducted during the term of this renewal will consider all buildings that fall within the yet to be determined delineated area.

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

THE GOVERNMENT WILL BE FAIR AND REASONABLE.

Using the current data, we have determined that the price negotiated when the option was incorporated into this lease is fair and reasonable CoStar market research indicates current base market rates (shell and operating rent) for this area to be between $ $ Based on this information the negotiated rental rate for this renewal period falls in this range and should be found to be fair and reasonable.

Current Location Alternate Location

Shell & Taxes

Operating

Tenant Improvements $

Move Costs $

Total

Cost Savings

The details of the above cost benefit analysis are based off the negotiated rental rate at the current location for the first column. The Alternate Location column source is data taken from CoStar where comparable properties and their shell and taxes were found. Operating Costs were determined from historical data at the current location. The Tenant Improvements data comes from GSA’s tenant improvement allowance calculator. The Moving Costs figure comes from GSA’s Succeeding Lease Analysis Tool.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

A formal market survey was not conducted for this lease renewal as moving the agency for the term of this renewal would be cost prohibitive and disruptive to the agency but will be conducted during the long term replacement procurement that will be conducted during the renewal period.

An ad was posted beta.SAM.gov to inform the public of the government’s intention to renew the lease and no responses were received.

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

COMPETITION.

In order to comply with the PBS Commissioner’s initiative to save taxpayer dollars through rental savings we have been prioritizing our procurements based on the overall value of the contract and the potential for rental savings. In situations where the space currently occupied has been confirmed by the GSA Property Manager to be capable of meeting the government's continued needs and agencies continued mission need Region 5 is renewing the lease based on the small financial risk to the government. Moving actions forward through renewals will allow the region to focus on deals with higher financial impact, realign our expiring workload in a phased manner and realize the organization's goal of longer term strategic planning.

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

ACQUISITION.

Not Applicable

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

OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT

ACQUISITION.

Through continued focus on longer term strategic planning with our clients and negotiating longer lease terms GSA will be able to better manage our inventory and reduce the need for non-competitive lease renewals.

11. CONTRACTING OFFICER CERTIFICATION

I, the Lease Contracting Officer, certify that the above information is accurate and complete to the best of my knowledge

PREPARED BY:

Matthew Sermont, Realty Specialist Date

APPROVED BY:

Kim Gill, Lease Contracting Officer Date