JOFOC LCO Final Copy 03.17.2025_Redacted.pdf

Justification for Other Than Full and Open

Competition, Succeeding Lease Department of Veterans Affairs

Veteran Health Administration (VHA)

VHA Regional Procurement Office Central

Network Contracting Office 1 O (NCO 10)

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE/SOLICITATION NUMBER: VA250-12-L-0103

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

The Veterans Health Administration (VHA) currently leases 9,989 ABOA /10,000 rentable square feet (RSF) of medical space at Cleveland Ambulatory Surgery Center, located at 8910 North Superior Avenue, Cleveland, OH 44115 under lease number VA250-12-L-0103 for the Louis Stokes Northeast Ohio VHA Veterans Administration Medical Center. The current lease expires April 13, 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).

VHA submitted a continuing need letter on August 17, 2023, for 10,000 rentable square feet of medical and related space. To satisfy the VHA mission requirements, the facility must be within the following delineated area: North lake Erie; East- Lakeshore Blvd., East 152nd St., Euclid Ave., North Taylor Ave. South Taylor Ave., Fairmount Blvd., and Lee Road; South- Woodland Road and Buckeye Road; West- East 30th St., and St. Claire Ave. (see attached)

This requirement is for 9,989 ABOA/ 10,000 RSF of space for a 9-year term (108 months); 5-years firm-term (60-months) to commence on . The estimated cost of the firm-term is $ per RSF per year fully serviced; for an annual cost of $ ; the estimated cost of the 60-months non-firm term is $ per RSF per year fully serviced;

for an annual cost of $ ; resulting in a total contract value of

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: Succeeding Leases. In accordance with GSAR 570.402, use of the sole source authority is appropriate where the lease contracting officer does not identify any potential acceptable locations through advertisement and market research, or it is determined that award to any other offerer 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 570.402-5 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. 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 VHA to incur move and replication costs that would not be recovered through competition. Relocation costs are estimated to be $ ; with additional furniture costs of . Additionally, this allows the Government to make use of existing tenant improvements, avoiding replication costs of $ . Replication costs include providing a 23- hour stay, free-standing Ambulatory Surgery Center with at least three operating rooms, with additional support space. A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6. The cost of relocating VHA using the low-cost quote exceeds the cost of remaining at 8910 North Superior Avenue, Cleveland, OH 44115., The total savings to the Government is $ .

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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 VHA Lease Contracting Office placed a sources sought/succeeding lease advertisement on the Contracting Opportunities domain of SAM.gov on September 20,2023, for 8 (eight) days. In addition, market research was conducted using the Costar and LoopNet websites.

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

WILL BE FAIR AND REASONABLE.

Recent market research conducted by the VHA Lease Contracting Office in Cleveland, Ohio showed the rental rate, within the market area ranges from $ to $ per RSF fully serviced.

Therefore, the anticipated rental rate for this succeeding lease of $ per RSF, are within the current market range for this submarket and are deemed fair and reasonable by the VHA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

Market research was conducted using CoStar and LoopNet. and one (1) potentially acceptable locations were identified, including the incumbent, that might meet the agency's needs within the delineated area. In addition, the VHA Lease Contracting Officer posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on September 20, 2023. The incumbent Lessor's expression of interest indicated that the rate would be $ per RSF fully serviced.

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

Property Property Fully Serviced Renl' ... (figure Name Address Contact RSF Rate based on 10,000)

(Incumbent) 8901 Superior 1 Ambulatory Ave.,Clevel and, Josh

Surgery Ctr OH 44115 Hauserman $ $

7 575 N orthciff

2 Ridgepark Ave., Brooklyn, White Hat Medical Center OH 44144 Management $ $

3401 Enterprise

3 Pky, Chagrin Beachwo od, OH

Corridor 44122 Dennis Bush $ $

4 804 Leavitt Rd, Lorain Surgery Lorain, OH BharatJ.

Center 44053 Shaw $ $

6701 Rockside

Road.

Rockside Ind epe nd ence, Medical Center OH 44131 CBRE $ $

Market Avg. $ $

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

Remaining at the current location under the proposed succeeding lease would allow the local VA Medical Center (VAMC) to continue operations without disruption. Furthermore, the 5-year firm term will allow for the local VAMC to prepare, approve, and submit a prospectus level new replacing lease action to Construction and Facilities Management (CFM). The non-firm term will allow the local VAMC flexibility in transition from the current location to the new replacing location. Lastly, the incumbent Lessor has a strong past performance record with VHA. Lessor has successfully performed all obligations to current under the expiring lease and the VHA client agency is satisfied with the current location's building condition.

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

RTD Cleveland LLC (Incumbent)

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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, VHA 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 VHA Lease Contracting Officer certifies that the award of a succeeding lease of 10,000 RSF is in the Government's best interest and that this Justification is accurate and complete to the best of the VHA Lease Contracting Officer's knowledge and belief.

Lease Contracting Officer Network Contracting Office 10

12. PREPARER'STECHNICAL 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.

Contracting Officer's Representative Associate Chief, Community Outpatient Service VA Northeast Ohio Healthcare System

13. APPROVALS IN ACCORDANCE WITH FAR 6.304 and OCRM RPPM 2023-01.

a. One Level Above the Lease Contracting Officer (required when the anticipated value of the succeeding lease is above SLAT and exceeds $750K total contract value): I certify the justification meets requirements for other than full and open competition.

Lease Contracting Officer Leasing Team #2

Division Chief-Leasing & Construction

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Director of Contracting

b. VA HCA for Leasing Review and Approval (required when the anticipated value of the succeeding lease is above the SLAT and exceeds $750K total contract value): I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve for other than full and open competition.

Associate Executive Director Office of Real Property Office of Construction and Facilities Management

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Built in 1951 14,533 - 43,599 SF Spaces

$17.00 SF/YR

Cleveland, OH, 44115 3121 Euclid Ave

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