2AZ0435 SAM Justification.pdf

U.S. General Services Administration

GSA Region 9

Real Estate Acquisition Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 2AZ0435

Agency Name: Social Security Administration (SSA)

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

The General Services Administration currently leases 12,783ABOA/13,000 rentable square feet (RSF) of office space at 88 W. 38th St., South Tucson, AZ under lease number GS-09-LAZ01976 for the SSA. The current lease has a rental rate of REDACTED per RSF per year and expires 10/20/23. Approval is requested to negotiate two renewal options with the incumbent Lessor without full and open competition for continued occupancy at this leased location. The right to pursue a renewal option is detailed in GSAR 570.401: Renewal Options.

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

(INCLUDING ESTIMATED VALUE).

GSA has confirmed the need for a renewal option(s) at this leased location.

This requirement is to add two five-year renewal options. The estimated cost of the first option is REDACTED per RSF per year for an annual cost of REDACTED. The estimated cost of the second option is REDACTED per RSF per year for an annual cost of REDACTED. The total contract value of these options is estimated to be REDACTED.

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. In accordance with FAR 6.302-1, it is determined that 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.

It is in the best interest of the Government to remain at the current location. Award to other than the current Lessor would require relocation of the entire requirement and would cause SSA to incur move and replication costs that would not be recovered through competition. Relocation costs are estimated to be REDACTED. Additionally, this allows the Government to make use of existing tenant improvements, avoiding replication costs of REDACTED. Current space includes, but is not limited to, private offices, large training/conference room, private and public restrooms, interview areas/barrier walls, and large waiting room.

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

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

Per the requirements of GSAR 570.401, the GSA Lease Contracting Officer placed a notice in the System for Award Management, Contracting Opportunities (SAM) on 4/12/23 for 10 days.

In addition, GSA conducted market research using CoStar to locate alternative locations.

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

THE GOVERNMENT WILL BE FAIR AND REASONABLE.

An analysis of the market in S. Tucson, AZ showed the rental rate within the delineated area ranges from REDACTED to REDACTED per RSF, as identified via CoStar Market Reports.

Although the anticipated rates of REDACTED and REDACTED per RSF is higher than the market range, the higher rates are justified as fair and reasonable by the below savings demonstrated from the following cost-benefit analysis:

Low quote of alternate available space for first renewal term (13,000 RSF x REDACTED /RSF x 5 years)

REDACTED

Low quote of alternate available space for second renewal term (13,000 RSF X REDACTED /RSF X 5 years)

REDACTED

Tenant improvement costs* REDACTED

Moving costs for furniture REDACTED

Moving costs for telecommunications REDACTED

Total costs estimated for alternate location REDACTED

*NCMT estimate.

Low quote of alternate available space for first renewal term (13,000 RSF x REDACTED /RSF x 5 years)

REDACTED

Low quote of alternate available space for second renewal term (13,000 RSF X REDACTED /RSF X 5 years)

REDACTED

Tenant improvement costs REDACTED

Moving costs for furniture REDACTED

Moving costs for telecommunications REDACTED

Total costs estimated for current location REDACTED

Estimated savings to the Government to remain in current location REDACTED

Therefore, the proposed rental rates for this renewal option lease of REDACTED and REDACTED per RSF are deemed fair and reasonable by the GSA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On January 13, 2023 GSA conducted market research using CoStar and identified 4 potentially acceptable locations (3 plus the incumbent) that might meet the agency’s needs within the delineated area. The three potential locations, other than the incumbent, breakout as one Class A office space and two retail locations that could potentially house SSA. In addition, GSA placed a notice conforming to GSAR 570.402-2 on beta.SAM on 4/12/23. The incumbent Lessor’s expression of interest indicated that the rate would be REDACTED per RSF for the first option, and REDACTED per RSF for the second option.

See Figure 1 below for the results of the market research and SAM notice, including the incumbent.

Address Source [EOI/CoStar, etc.] Estimated Full Service Rental Rate

88 W. 38th St., S. Tucson, AZ EOI REDACTED

3390 S 6th Ave., S. Tucson, AZ CoStar REDACTED

5133-5265 S Calle Santa Cruz, S.

Tucson, AZ

CoStar REDACTED

1600 E Idea Ln., S. Tucson, AZ CoStar REDACTED

*escalated 5% yearly for estimated second option rate

Figure 1: Market Research Comparables

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

The SSA is satisfied with the leased space and the GSA Lease Administration Manager confirmed the Lessor is responsive. There are no documented fire protection and life safety deficiencies for the location.

There have been no previous renewal options added to this lease and there is no increase in square footage.

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

ACQUISITION.

B77 Development LLC (incumbent)

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 addition of two renewal options 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.

________ REDACTED _____________________ Date_____7/12/2023________________

Susan Baghdikian, 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.

________ REDACTED ____________________ Date_______7/13/2023_______________

Eric Johnson, Leasing Specialist

CONCUR:

REDACTED

____________________________Date_____7/17/2023 ________ Guadalupe Flores, Branch Chief

____________________________Date_____7/17/2023 ________ Pamela Collins, Director Real Estate Acquisition Division

APPROVED: ____________________________Date______7/17/2023________ Jessica L. Escobedo

R9 Regional Competition Advocate (Leasing)