2MA0216 Redacted JOTFOC.pdf

Justification for Other Than Full and Open

Competition, Succeeding Lease

U.S. General Services Administration GSA Region 1

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 2MA0216

Agency Name:

Location: Worcester, MA

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

The General Services Administration currently leases 10,613 ABOA/12,311 rentable square feet (RSF) of office space at Worcester, MA under lease number LMA04289 for the

( The space was remeasured after the start of this project, resulting in an increase in the square footage to 10,822 ABOA SF/12,730 RSF. There is no intent to change the leased space, but the square footage would be corrected under a succeeding lease. The current lease expires June 29, 2025. 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 GSAR 570.402: Succeeding Leases.

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

(INCLUDING ESTIMATED VALUE).

submitted a continuing need letter on January 13, 2023, for 10,613 ABOA SF of office and related space. To satisfy the mission requirements, the offered space must be contiguous on a single floor or adjoining floors. Offered space cannot be located near agencies providing probation and/or parole services, halfway houses, drug abuse counseling/rehabilitation programs, and similar social service agencies and welfare type programs, as well as private law firms representing drug offenders. Building entrances/exits cannot be co-located with or located 1,000 feet minimum, line of sight or within the vicinity of drug-free zone; residential/hotels/shopping center and areas where drug activities are prevalent; and/or where easy surveillance of facilities or operations is possible.

This requirement is for a minimum of 10,613 ABOA SF to a maximum of 11,144 ABOA SF of space for a 8 year, 4 year firm term lease estimated to commence on June 30, 2025. The estimated cost of this lease is $ per rentable square feet per year for an average annual cost of $ and a total contract value of $ The delineated area is within the city limits of Worcester, MA.

There is no vacant Federal Space available.

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, use of the sole source authority is appropriate where 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 to incur move and replication costs that would not be recovered through competition. Relocation costs are estimated to be $ consisting of $ in furniture costs and $ in telecom move costs.

Additionally, this allows the Government to make use of existing tenant improvements, avoiding replication costs of $ inclusive of interest. An IGE completed on April 6, 2022. Because the current location does not require any TI work, an updated IGE was not completed. For the purposes of the cost benefit analysis below, the IGE provides for estimated buildout costs at an alternative location of $ ($ per RSF) for tenant improvements and $ ($ per RSF) for BSAC.

A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6. The cost of relocating using the low cost quote exceeds the cost of remaining at 446 Main Street. The total savings to the Government is $

Cost Benefit Analysis Incumbent Location

Low Cost Alternative

Shell & Operating (Full Term) $ $

Amortized Tenant Improvements1 $ $

Lump Sum Tenant Improvements2 $ $

Amortized BSAC3 $ $

Lump Sum BSAC4 $ $

Parking $ $

Furniture Costs $ $

Telecom Move Costs $ $

Total Costs $ $

Aggregate Cost Savings associated with Staying in Place

1Amortized tenant improvements are calculated using the approved tenant improvement allowance of $ per ABOA SF, amortized over the 4 year firm term at a market average rate of 2Lump Sum tenant improvements for the alternate location are calculated using the IGE completed on April 6, 2022, showing an estimated buildout cost at an alternative location of $ less the amortized tenant improvements. The remaining $ reflects the lump sum payment.

3Amortized Building Specific Amortized Capital (BSAC) is calculated using the Security Level III BSAC allowance of $ per ABOA SF, amortized over the 4 year firm term at a market average rate of 4Lump sum BSAC for the alternate location are calculated using the IGE completed on April 6, 2022, showing an estimated buildout cost at an alternative location of. $ less the amortized tenant improvements. The remaining $ reflects the lump sum payment.

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 February 5, 2025, through February 7, 2025. In addition, CBRE, Inc. conducted market research using CoStar, LoopNet, and direct contact to local brokers, property owners, and developers to maximize potential competition. Nine properties that could potentially meet the requirements were identified through market research, and one additional expression of interest was submitted in response to the ad.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market surveys conducted by CBRE in Worcester, MA showed the rental rate within the delineated area ranges from $ per RSF NNN at to $ per RSF modified gross at

Adjusting the rates to correspond with GSA shell requirements, the $ per RSF NNN rate at would be increased by $ per RSF to account for taxes, insurance, and maintenance, plus an additional $ per RSF to account for the Government’s above-market warm-lit shell and Energy Star requirements. The adjusted low end of the shell rent range would be $ per RSF. The $ per RSF rate at includes some operating costs, however, it excludes tenant electricity and would not include the janitorial scope required in a GSA lease. Adjusting to remove $ per RSF in operating cost components, the base rent would be $ per RSF. The base rent would then need to be increased by $ per RSF to account for the Government’s above-market warm-lit shell and Energy Star requirements, bringing the shell rate to $ per RSF. The resulting market range for the shell rent for the first year of term is $ to $ per RSF. As identified in the negotiation objectives, annual rent escalations of are typical in the market. Averaging the shell rent escalations over an 8 year term, the market shell range would be $ per RSF to $ per RSF. Operating costs are estimated at $ per RSF. The average annual market rent for shell and operating combined would thus be $ per RSF to $ per RSF.

The proposed average annual rental shell and operating rate for this succeeding lease is $ / 8 years / 12,730 RSF = $ per RSF. Therefore, the proposed rates are within the current market range for this submarket and are deemed fair and reasonable by the GSA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

GSAR 570.402-5 allows for negotiation with the incumbent Lessor when a cost-benefit analysis shows that the Government cannot expect to recover relocation and duplication costs through competition.

On April 13, 2023, CBRE, Inc. conducted market research CoStar and identified four potentially acceptable locations (three plus the incumbent) that might meet the agency’s needs within the delineated area. All three buildings are located within the delineated area and could potentially meet the square footage, contiguous space, and parking requirements, However, because no expressions of interest were received for the potential alternative locations a security review was not completed for the properties to determine if they meet the agency’s security requirements. In addition, PBS posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on February 5, 2025. The incumbent Lessor confirmed interest in the procurement and had previously submitted pricing on March 17, 2023, stating that the rate would be $ per RSF for year 1, $ per RSF for year 2, and plus $ per RSF annual escalations each year thereafter. Operating costs were stated as $ per RSF. One additional expression of interest was received for on February 11, 2025, at a rate of $ per RSF full service, but the property could not meet the requirements, because it is located too close to residential properties. The available property with the lowest cost advertised rate of $ per RSF NNN is

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

Address Source [EOI/CoStar, etc.] Asking Shell Rental Rate*

Incumbent Location $ /RSF Shell Plus $ /RSF annual escalations

EOI $ /RSF Full Service (excluding TI and BSAC).

CoStar $ /RSF Shell Plus estimated annual escalations

CoStar $ /RSF Shell Plus estimated annual escalations

CoStar $ /RSF Shell Plus estimated annual escalations

CoStar Not Provided

CoStar Not Provided

CoStar Not Provided

CoStar $ /RSF Shell Plus estimated annual escalations

CoStar $ /RSF Shell Plus estimated annual escalations

CoStar $ /RSF Shell Plus estimated annual escalations

Figure 1: Market Research Comparables *Advertised asking rates were quoted at varying service levels. See paragraph 6 for details on adjustments required to compare the quoted rates to shell rates for a GSA lease.

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

Prior to the start of project 2MA0216, numerous attempts to satisfy the requirement with a competitive procurement were made under project 6MA0205. Under that project 4 separate ads were posted over the course of 2 years, each with consecutively larger delineated areas that eventually captured the entire 2nd congressional district of Massachusetts. In response to those ads, a total of 16 properties were considered, of which 3 properties were approved for solicitation under two iterations of the RLP. None of the solicited properties were viable, as 2 were withdrawn by the offeror prior to receipt of initial offers, and 1 was withdrawn during negotiations due to a lack of site control. With a lack of alternative options available after scouring the largest possible delineated area that the agency could bear, project 6MA0205 was cancelled, and the current project was restarted with the intent to pursue a succeeding lease.

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

ACQUISITION.

Expressions of interest were received from the following:

Incumbent lessor, for the current location at for Worcester, MA

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 12,730 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_____________________ Dan 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______________________ Matthew Bartlett, Transaction Management Director, CBRE, Inc.

Concurred By:

Date______________________ Crofton Whitfield, Competition Advocate