Santa Cruz - Pre-bid Conference Transcript.pdf

U.S. Department of Veterans Affairs (VA)

Santa Cruz Community-Based Outpatient Clinic (CBOC)

Pre-Bid Conference Transcript Solicitation 36C24W26R0077

Opening and Introductions

Welcome. We'll be getting started in just a few minutes. If you could please check your microphones and make sure you're muted, it'll help cut down on background noise.

Okay, I'll go ahead and get started. Welcome everyone. This is the VA pre-bid conference for the

Santa Cruz CBOC solicitation, which was released a few days ago. Just a reminder, this meeting is being recorded. You probably got a pop-up notice on your screen when you joined. The transcript and possibly the recording will be posted to SAM.gov so everyone has access to this information, and a copy of the presentation will also be uploaded to SAM.gov so you'll be able to get that as well.

My name is Caitlin Cunningham. I work for ISI Professional Services, and we are the broker assisting VA with this project. We also have Jennifer Shaw and David Stonehouse from ISI on the line as well. Hi, David.

We have a few folks from VA on the line as well. Thank you for joining. Here's a quick view of today's agenda: the purpose of the pre-bid conference and rules of engagement for this type of forum, a general overview of the project, the Request for Lease Proposals (RLP) package and the most important information you need to know, items that are called out that should definitely be addressed, the basic design of the facility, our standard forms and clauses that need to be submitted and become part of the lease contract, and then a question and answer period before we wrap up.

A general introduction to the project team: J.P. Niega is our Lease Contracting Officer (LCO), and

Loren Mollner is our Contract Specialist; Loren is on the line with us today. The Medical Center that will be the parent facility for this clinic is the VA Palo Alto Health Care System. As I said, I'm from ISI Professional Services, and I'm joined by David and Jennifer as well.

Purpose and Rules of Engagement

The purpose of this meeting is to provide a general overview of the requirements in the RLP, answer questions from anyone who has them, and give everyone a chance to see other parties interested in this project, for potential networking and partnership opportunities. This is a great forum for that as well.

A few reminders and rules of engagement. We'll be issuing an amendment for formal RFIs, or formal questions and answers, regarding the solicitation, along with the due date for those. All official questions must be submitted in writing so the government can respond in writing, and that becomes an official part of the solicitation process. Official responses to all questions get posted on SAM.gov as well.

You're welcome to ask questions during this presentation, but when you do, please identify yourself and the firm you're representing. Also, please keep procurement integrity in mind. There are rules we have to follow, and rules the government has to follow, regarding the types of questions we can answer and the information we can provide.

And again, a note for everyone who joined a few minutes late: this meeting is being recorded, and a transcript will be posted to SAM.gov.

Project Overview

Let's get into the project itself. This is a CBOC, a Community-Based Outpatient Clinic, in the Santa

Cruz area. We're looking at 13,000 to 15,500 ABOA Square Feet, and once you apply your common area factor, that needs to not exceed 20,000 Rentable Square Feet. We're looking for up to 55 on-site secured parking spaces, or more if local code requires it. This can be an existing building or new construction. VA is asking that the leased space not be on more than two contiguous floors.

This is a full and open competition, not a set-aside, and VA is using best-value trade-off methodology, not lowest-price-technically-acceptable. This will be a full-service lease net of utilities, meaning the government will pay for its own utilities and the Lessor will pay for everything else, including janitorial services, landscaping, building operations and maintenance, real estate taxes, insurance, the whole nine yards. VA is asking for occupancy within 12 months of award for an existing building and 18 months of award for new construction.

Key Sections of the RLP

We're going to go over some key sections of the RLP, the Request for Lease Proposals. That's the main solicitation document posted to SAM.gov. Keep in mind it's a long, complicated document with a lot of attachments and exhibits, and this presentation is a summary only. It does not contain all the information you need to put together a complete and responsive proposal; it's the highlight reel. If you're interested in submitting a proposal, please refer to the complete RLP package posted to SAM.gov for full detail.

Lease Term (Section 1.02)

VA is looking for pricing on two scenarios: a 20-year full term with 15 firm, meaning a 5-year soft term at the end of that 15-year firm term, and a 20-year firm term, meaning a non-cancellable lease for the full 20 years.

Delineated Area

VA is looking for space within a specific delineated area. If you look at our original advertisement requesting Expressions of Interest on SAM.gov, you'll see a narrative description of the delineated area; it's also included in the RLP. The map extends all the way up Highway 17 and into Scotts

Valley, includes the Capitola and Soquel areas, and extends down to the coast.

Unique Requirements

These are things VA has asked for specifically to support operations at this facility. As noted, no more than two contiguous floors, and VA has a preference for the ground floor. With Veteran patients coming in and out for appointments, multiple floors can create a bottleneck, so VA prefers the first floor to minimize things like waiting for elevators. If you do offer space on more than one floor, or above the first floor, VA is looking for suitable passenger and freight elevators, meaning elevators that conform to local code and can accommodate that flow of patients in and out of the facility, plus a separate freight elevator.

VA wants parking on site or immediately adjacent to the building, with no structured parking, so a surface parking lot. No bifurcated sites, meaning the facility and parking shouldn't be separated, for example by being on opposite sides of a street. The entirety of the facility and parking needs to be contiguous.

On flood plain: VA is looking for sites where the area leased to VA is not within the 100-year flood plain. If you have a larger parcel where only a portion is in the flood plain, that might be acceptable, but the facility, the parking, and all ingress and egress must be outside the flood plain. VA will not lease any portion of the facility or site that is within the 100-year flood plain.

We're also looking for proper zoning already in place, or an Offeror needs to show a plan to obtain the proper zoning quickly after award. The facility needs a loading area that can accommodate box trucks for deliveries. On ambulance access: VA is not expecting ambulances to arrive with patients, since there are emergency departments for that, but there does need to be an area where an ambulance could pull up to escort a patient out in the event of an on-site emergency.

VA is also sensitive to incompatible uses located nearby, such as marijuana dispensaries, correctional facilities, any facility that sells firearms or ammunition, railroads, or flight paths. VA wants to create a healing environment, so the surrounding area needs to be conducive to that.

They're also looking for proximity to amenities and public transportation, for Veteran patients and their families as well as VA staff.

RLP Attachments and Exhibits

The RLP is a big, complex document. There's a screen grab in the presentation showing the full list of attachments and exhibits, including the Agency-Specific Requirements, which run several hundred pages of documents you'll need to review and comply with. If you have questions, reach out to the broker team; we're happy to answer them. There are also outside firms that provide guidance and consulting services to parties interested in projects like this.

Make sure you've downloaded all these items from SAM.gov and that you're able to open and read them. Note that the Agency-Specific Requirements package, item number five, is a very long document that contains links to other resources, including requirements posted on VA's website.

Make sure you click through and download those additional documents. Some links may require an access request if the information is sensitive, so allow yourself enough time for that.

Security Requirements (Section One / Exhibit 5)

This facility is Facility Security Level II (FSL II), which is a specific government leasing designation with its own set of requirements.

Section Two: Efficiency of Layout

To be acceptable for award, the offered space must provide an efficient layout as determined by the LCO. VA will look at a test fit or conceptual design showing how well your building or site can accommodate the required uses of the space, the required patient flow, and the parking.

Section 2.02 covers flood plains: the lease will not be awarded for a site within the 100-year flood zone unless the government has no other practicable alternative. This includes adjacency to the

100-year flood zone where that adjacency would restrict ingress and egress to the premises, since even a site outside the flood zone needs to allow patients and staff to exit safely in the event of a flood.

Other requirements in this part of the RLP cover seismic safety, asbestos for existing buildings, accessibility, fire protection and life safety, and the Energy Star label.

Section 2.10 covers due diligence and NEPA (National Environmental Policy Act) requirements.

At the LCO's direction, the Offeror must provide a Phase I ESA of the site, so if you're interested in submitting a proposal, get that process underway. The Offeror is responsible for addressing any recognized environmental conditions identified in that analysis. The government is responsible for NEPA compliance, which is a decision-making and analysis tool the government uses to determine whether a proposed action will affect the surrounding environment; the government will ask for the Offeror's assistance providing information as part of that process, and a proposal may be rejected if the NEPA analysis doesn't support the project.

There are also National Historic Preservation Act requirements. The government is responsible for compliance but will ask for the Offeror's assistance if there's any impact to historical or cultural resources in the area. An Offeror may be responsible for further studies if offering a historic building, a site in a historic district, or a site with historic or cultural significance. A cultural resources study report must be submitted with the initial offer for new construction, build-to-suit, demolition, or other significant ground-disturbing work, alongside the Phase I ESA.

Section Three: How to Offer

This is the real meat of the solicitation when it comes to putting your proposal together: exactly what information the government wants and in what format. Read this section carefully and follow the instructions. There are detailed instructions on what needs to be submitted, in what format, and in which volume.

Section 3.01 covers instructions for Offerors. There's a standalone cover page, behind which is the compliance matrix. This Offeror proposal compliance matrix is your best friend; it's a checklist to make sure you've submitted everything required, and the government uses it to verify the proposal was received in full.

Volume 1.A, technical evaluation, includes the proposal compliance matrix; evidence the site is located within the delineated area shown on the map; evidence of zoning compliance or a plan for how it will be obtained; and evidence of amenities, access to public transportation, and emergency services in the area, including evidence that any planned amenities will exist by the occupancy date.

Volume 1.A - Technical Evaluation Factor 1 (architectural), covers plans and narratives for the scaled floor plan, a vending facility statement, a parking plan and narrative, fire protection and life safety information, and evidence of accessibility compliance. For an existing building, an asbestos report and any abatement information is needed. Energy Star and efficiency documentation is required, and any new construction project needs a Green Globes certification appropriate to the facility size. A hydrology statement is also required in this section.

Technical Evaluation Factor 2 is past performance: affirmation of past performance, a list of references, past performance questionnaires, and a list of relevant projects and case studies, similar to references and work history for a job application. Also required is information on your design team (the A/E firm helping with conceptual design and completing this proposal) and your general contractor, including narratives, licenses, and certifications for each, with confirmation they're licensed in California. VA also wants evidence of an existing teaming arrangement between the developer and the general contractor, and between the developer and the architect, to confirm there's an actual contractual relationship in place so no one is surprised after lease award. Standard forms required here include SF-330 for A/E qualifications and GSA Form 527 for the contractor's qualifications, plus a project management plan with an organizational chart.

Technical Evaluation Factor 3 covers how, after lease award, design, and construction, you will operate and maintain the building for the entire lease term. VA wants an operations and maintenance plan and an acknowledgment of understanding of all O&M requirements the Lessor will need to follow.

Factor 4 is general information confirming you can be awarded a contract by the government:

registration in SAM.gov, SBA VetCert certification if you're an SDVOSB or VOSB (including for joint ventures), and a small business subcontracting plan if you're not a small business.

Volume 3 covers environmental and historic submittals: evidence of flood plain status, seismic compliance, disclosure of any hazardous conditions or environmental releases, NEPA due diligence and copies of other studies, NHPA documentation, and the cultural resources study report (required for new construction and significant ground-disturbing work).

Volume 4 covers additional submittals: an entity acknowledgment form, an authorization form to represent site ownership, evidence of ownership and how it relates to the offering entity, evidence of any agreement to acquire an interest in the property (such as an option or purchase and sale contract) if you don't already own it, proof of signature authority for corporate entities, a statement on conflicts of interest, the legal description of the property and tax ID, and the required telecommunications representation (the Huawei certification). There are also three RLP exhibits requiring initials: Exhibit 22 on how the broker commission works, one on new construction, and one confirming the lease is net of utilities.

Proposals are due October 26th at 5:00 p.m. Pacific time (8:00 p.m. Eastern), per the amendment posted to SAM.gov, submitted via email to the LCO, J.P., and to me as broker.

Price Proposal (Volume Two)

The price proposal is submitted separately from the technical volumes. No pricing information should appear anywhere in the technical volumes; it stays completely separate in its own volume.

This volume includes: Form 1217, your annual cost statement, where operating expenses go;

Form 1364, the official price proposal to lease space, with an attachment showing rent over the entire 20-year term; the vendorization form, submitted to get you into VA's payment system (there have been delays processing this form in the past, which held up Lessor payments, so VA likes to see it submitted early); a broker commission agreement; and your financial plan for the project, including evidence that funds are available.

An important point for government projects: the government does not make payments until the project is completely done. If you've worked on a government construction contract before and received progress payments, note that a leasing project works differently, there are no progress payments. No payments are made until the facility is accepted as complete, at which point tenant improvements are typically paid in a lump sum and rent begins. Plan your financing accordingly;

there's no income on this project until construction is complete and VA has accepted the facility.

Tenant Improvement and Operating Cost Pricing (Sections 3.05 and 3.08)

Section 3.05 covers TI pricing. The TI allowance will range from roughly $10.4 million to $12.4 million, reflecting the range of eligible square footage, at a fixed rate of $800 per ABOA square foot used by every Offeror for pricing purposes. Tenant Improvements are the fixtures, finishes, and buildout that take a facility from warm, lit shell to the finished, usable condition VA requires in the RLP, everything above and beyond the shell that makes a VA facility, a VA facility.

Section 3.08 covers operating costs, which go on Form 1217. These are all building operations costs paid by VA as part of rent, separate from shell rent. Shell rent covers just the building;

operating costs cover everything required to maintain and operate it. Utilities are excluded from rent, VA pays those separately, and the Lessor must provide separate metering at the Lessor's expense. Minimum requirements for normal operating hours, janitorial services, and required interior and exterior operations and maintenance are detailed in the agency-specific requirements.

Section Four: Evaluation

This section covers how proposals will be evaluated. This is a best-value trade-off evaluation, meaning technical factors are significantly more important than price. VA wants to award the lease that is the best value to the government and get the most for its money.

Factor 1, Technical Quality, is the most heavily weighted: architectural concept and building design and layout, how closely you match the preferred layout in the agency-specific requirements, site quality and site characteristics, and sustainable design and energy efficiency.

Factor 2 is the Offeror's qualifications and past performance: experience with other government or VA projects, healthcare leases or facilities, the Offeror's qualifications and those of the design team and general contractor, and the project management plan.

Factor 3 covers how you will operate and maintain the space after VA occupies it, for the life of the lease: interior and exterior maintenance of the building and grounds, response to emergency and routine maintenance calls, staffing plan, administrative procedures, and quality control plan for property management.

Factor 4 is socioeconomic status. SDVOSBs receive the most weight, followed by VOSBs, then small businesses, then all other businesses.

For each factor, the RLP provides the evaluation criteria describing how VA will analyze each proposal against that factor, the elements included in the factor and how well the proposal addresses them, the submittal requirements, and documentation requirements including page limitations.

Section 4.04 covers price evaluation. Because Offerors may propose things like stepped rent or annual percentage escalations, VA needs a consistent way to compare all offers, by reducing each to a present value price per square foot. This lets VA compare offers on an apples-to-apples basis from lowest to highest price. This section of the RLP describes that calculation, so you can run the math yourself and see your present value price per square foot for the offer you're submitting.

Section 4.05 covers how award works. After proposals are submitted, a technical evaluation board convenes and proposals are evaluated. VA will likely go back out with feedback to Offerors and a chance to revise proposals, which can continue for a couple of rounds. Once VA has identified an awardee, they move forward with the lease award process, and the awardee receives a lease based on the template attached to the RLP.

The Lease Contract

The lease contract is made up of five items: GSA Form 3517 (general clauses), pertinent sections of the awarded proposal, the site plans, elevations, and renderings, and GSA Form 1217 for operating costs. There's a copy of the template lease included in the RLP package for review, so you can confirm you're willing and able to do everything it requires.

Upon lease award, VA transfers the successful proposal's information into the lease document;

Form 1364 itself does not carry forward, its information gets built into the lease. Offerors must read the lease in its entirety and confirm they understand and can perform the requirements as written.

Post-award lease performance covers the design and construction/renovation process, along with ongoing operations and maintenance obligations once VA takes occupancy. These performance requirements appear only in the lease, not in the RLP.

Note that VA uses GSA's documents as a baseline and then makes them VA-specific, so the lease, like the RLP, has some deviations from GSA's standard templates. These are marked throughout, typically noting something like "VA version, May 2026," so if you're used to GSA's templates, keep an eye out for those differences.

Agency-Specific Requirements

This is where VA's detailed facility requirements live. Each Offeror must submit a test fit or conceptual design showing how VA's desired space uses will be laid out in the offered building.

This is evaluated under Factor 1, the most heavily weighted factor, and becomes the basis for the post-award design period.

Design must comply with the agency-specific requirements in the RLP, a lease design narrative, a room data matrix, VA's PACT (Patient Aligned Care Team) design guide and prototype standards, federal regulations including the Interagency Security Committee (ISC) policy for leases, VA's own design standards and directives for leases, applicable state and local codes and ordinances, and accessibility standards under the ABA and VA's barrier-free design standards.

The Agency-Specific Requirements contain hyperlinked terms (shown as blue boxes) linking out to additional documents such as the Lease Design Narrative and Room Data Matrix, which you'll need to click through and download for full compliance information.

The Room Data Matrix is a table showing room numbers, room names, square footage, and quantity for each area of the facility. For example, the lobby and reception area must include a housekeeping aide closet, a wheelchair alcove, a shared office, and an operations room, among other spaces. Totaling these figures gives you the departmental NSF.

The Lease Design Narrative consolidates all governing codes, standards, references, and guidelines in one place. Together with the Room Data Matrix, it sets the performance-based standards for each room and function, down to the components required in, for example, an exam room or a consult room.

Physical Security

As noted, this facility is FSL II. The Lessor must provide an intrusion detection system, a physical access control system (so no one can enter without being buzzed in or swiping a key card or fob), a security surveillance system, a nurse call system, and a public address system. Further security requirements are detailed in a separate RLP exhibit.

Ongoing Maintenance

Lease award is only the first step; the building will need to be managed for the next 15 to 20 years.

The Agency-Specific Requirements cover building system testing and continual upkeep of landscaping and janitorial services. Janitorial services must be provided not just in standard office and lobby areas but in clinical areas as well, under specific criteria. The Lessor must provide waste and recycling services, though VA is responsible for hazardous and pathological waste disposal. The Lessor must also have a building superintendent or local representative available to promptly correct any deficiencies.

Conceptual Floor Plan

The agency-specific requirements include a conceptual floor plan representing VA's ideal layout for this facility, showing the lobby area, front-of-house functions, the clinical area, back-office functions, and the division between public and private areas. The closer a proposal's design comes to this ideal layout, the more favorably it will generally be evaluated.

Standard Government Forms

ISI is here to answer general questions about these forms, though there are also outside consultants who can help. The main form is Form 1364, the price proposal document; this form plus its Excel attachment, together with Form 1217 for operating costs, constitutes your full price proposal. Because VA is requesting two lease term scenarios, a 15-year firm/20-year full term and a 20-year firm term, two versions of Form 1364 and two versions of the Excel attachment need to be submitted.

A few pointers on Form 1364: make sure your rentable square feet and ABOA square feet match

Form 1217 and stay consistent throughout the entire proposal. Check your math, each column should add up correctly, and confirm your price per square foot is calculated correctly, since we check that. Break down your pricing accurately between shell rent (the warm, lit shell) and tenant improvements (everything above and beyond the shell that gets you the specific VA space).

Form 1217 covers all estimated operating expenses, your annual maintenance and janitorial costs. Since VA pays its own utilities, make sure everything is separately metered and the hookups are ready. Ensure the information on Form 1217 carries over consistently to Form 1364 and the rest of the proposal, and double-check your math.

Form 1217 has separate columns for the entire building, in a multi-tenant situation, and for just the government-leased area. If VA is not occupying the entire building, make sure the amounts allocated to VA's space reflect an accurate proportionate share, for example, if there are three other tenants in the building, VA should only pay for its own heating and cooling, not everyone else's, and the same applies to proportionate shares of landscaping and common area maintenance. We check that math as well.

Line 27 on Form 1217, highlighted in the presentation, is your total annual operating cost, the number that carries over to Form 1364, so make sure those match. This is your estimated annual cost to operate the facility for VA. Lines 28 through 32 are costs of ownership, real estate taxes, insurance, management, and so on, which get included in shell rent.

GSA Form 3517 gets attached to the lease at time of award. It's important to read this document and understand all the requirements, since it's essentially a list of regulations, some spelled out directly and some incorporated by reference to the GSAR or FAR, that you'll be required to comply with.

Closing Reminders

Read everything carefully. I know it's a lot, but it's all important, the RLP as well as the draft lease.

Use the proposal compliance matrix as your cheat sheet and checklist to confirm you've submitted everything required.

When you submit your proposal, initial every page, electronically with a stamp or automatic page numbering, or similar tool. This shows VA that you've read, understood, and agreed to the content of each page. Make sure all forms requiring a signature have been signed.

Check your information across all forms to confirm you're using the same ABOA square footage, the same RSF, and the same offering entity consistently throughout. If you're not already registered in SAM.gov, start that process as soon as possible, it takes time, since registrations must be submitted to GSA for review and approval before going live, and you must be registered in SAM at the time you submit your proposal.

Follow the structure and formatting instructions in the RLP as closely as possible, and provide good detail in your narrative substantiations and descriptions. Eliminate discrepancies; the same figures, entity names, square footage, and parking numbers should track consistently throughout the proposal. Inconsistencies raise red flags, generate questions, and reduce confidence in the proposal.

A note on conditional offers: if you submit an offer but indicate you won't provide something VA is asking for, such as janitorial services or landscaping, VA considers that a conditional offer and reserves the right to reject it. Be sure you're providing everything VA is asking for.

Questions and Answers

With about ten minutes remaining, the floor was opened for questions. Attendees unmuting to ask a question were asked to state their name and the firm they represent for the record. No questions were raised during this session.

Closing

Thank you so much for attending. The transcript of this meeting and these slides will be posted to SAM.gov. If you have further questions or want to say hello, please get in touch with me or anyone else on the ISI team. We love seeing this level of interest in the project. Best of luck, we can't wait to see your proposal.