3NC0340_JOTFOC_Redaction.pdf

Revised 12-06-2022

Justification for Other Than Full and Open Competition, Renewal Option

U.S. General Services Administration

GSA Region 4

Leasing Division – Branch 4P1L1C

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 3NC0340

Agency Name: Internal Revenue Service (IRS)

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

The General Services Administration currently leases 86,190 Rentable Square Feet (RSF) yielding 76,962 ANSI BOMA Office Area square feet (ABOA) at 4905 Koger Blvd, Greensboro, NC 27407-2711 under lease number GS-04B-LNC50010 for the Internal Revenue Service (IRS). The current lease expires June 30, 2024. Approval is requested to add and exercise a 5-yr/1-yr firm renewal option with the incumbent lessor without full and open competition for continued occupancy at this leased location to prevent disruption to the tenant agency’s mission until a new long-term lease has been awarded and space is completed for occupancy. The procedures for pursuing a renewal option are detailed in GSAR 570.401: Renewal Options.

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

(INCLUDING ESTIMATED VALUE).

This requirement is for 86,190 Rentable Square Feet (RSF) yielding 76,962 ANSI BOMA Office Area square feet (ABOA) for a5-year/1-year firm term to commence on July 1, 2024. The estimated annual cost of this lease is $18.78 per RSF per year for an annual cost of $1,618,436.35 for the first year and a total contract value of $29,996,301.37 incorporating expected rental adjustments over the term of the lease.

The delineated are North: Joseph M. Bryan/I-840/I-220 East: N. O’henry Blvd./S. O’henry Blvd.

South: I-40/W. Gate City Blvd./Guilford College Rd./Piedmont Pkwy. West: Highway 68

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. See FAR 6.302-1. See also GSAR 570.401 (provides for an unevaluated renewal option to be added after lease award). In accordance with GSAR 570.401 and federal leasing policy, the use of this sole source authority is appropriate when the contracting officer does not identify any potentially acceptable locations or when potentially acceptable locations are identified but a cost-benefit analysis shows the Government could not recover its costs.

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 because the lease contracting officer (LCO) did not identify any potentially acceptable locations that could meet the IRS’ mission requirements. Although the LCO conducted market research, including advertising the requirement through www.sam.gov, the only expression of interest received was incumbents. Therefore, no potentially acceptable locations, besides incumbent’s, were identified.

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

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

On May 09, 2023, GSA conducted market research and identified 0 potentially acceptable locations and only the current lessor that might meet the agency’s needs within the delineated area. Per the requirements of GSAR 570.402, the GSA Lease Contracting Officer placed an advertisement on www.sam.gov on May 09, 2023 and an updated ad on August 14, 2023, for 7 days. In addition, GSA LCO conducted market research using LoopNet, CoStar, and considered GSA current leases in Greensboro, NC.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market research conducted by GSA in Greensboro, NC, for comparable properties showed that the rental rate within the delineated area ranges from $14.00 - $34.00 per RSF. Therefore, the proposed rental rate of $18.78 RSF falls within the market range and deemed fair and reasonable by the GSA Lease

Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On May 9, 2023, GSA conducted market research using LoopNet, CoStar, and by considering GSA current leases in Greensboro, NC. In addition, GSA placed an advertisement conforming to GSAR 570.402-2 on www.sam.gov. The incumbent Lessor expressed interest and provided an informational quote to renew at the rate of $18.78 RSF (Year 1 - $18.78 RSF, Year 2 - $18.78 RSF, Year 3 - $18.78, Year 4 - $18.78, Year

5 - $18.78, Operating rent is based off 2022 CPI).

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

Address Source [EOI/CoStar, etc.] Asking Full Service

Rental Rate

4905 Koger Blvd, Greensboro, NC 27407-2711

(Incumbent)

INFORMATIONAL QUOTE VIA

EMAIL

$18.78

Figure 1: Market Research Comparable

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

A Broker task order was issued on June 6, 2019, for a long-term need (project 9NC2170) for IRS in

Greensboro, NC to reduce its current occupied space. Project 9NC2170 was put on hold due to IRS budget constraints and a three-year extension was negotiated with incumbent while IRS revisited their requirements to accommodate a space reduction. In January 2022 IRS and TIGTA provided their revised requirements which required they be co-located in Greensboro, NC and to search for a longer lease term for potential cost savings. Adding this five-year renewal option will prevent disruption to the tenant agency’s mission requirements until the new long-term lease has been awarded.

Staying in place will also allow the Government to make use of existing tenant improvements since this location houses both back office and public facing functions of the IRS. Though technically only a level II facility, due to the nature of the IRS mission and the vast number of public visitors to the location, many elements of the physical safety are built to a level III/IV level and will require significant investment to replicate. In addition, there are several large conference/training rooms that are built for in-person and virtual training of IRS employees, the cost of which to replicate would be significant.

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

ACQUISITION.

(Incumbent) 4905 Koger Blvd, Greensboro, NC 27407-2711

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 and exercise of a renewal option to extend the lease term by 5 years with the incumbent lessor without full and open competition for continued occupancy at the leased location, 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.

X Derek Sanders

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.

Concurred by:

X Marissa Williams

Section Chief, Leasing Divsion

Derek Sanders

Lease Contracting Officer

Ryan Y. Johnson

Branch Chief, Leasing Divsion

Heather Driskell

Lease Acquisition Officer (LAO)

Sabina A. Sims

Leasing Division Director

Pamela Mitschke

Competition Advocate

Approved By:

Giancarlo Brizzi

Regional Commissioner (4P)