IRS_Mays_Landing_JOFOC_redact.pdf

GENERAL SERVICES ADMINISTRATION

North Branch, Real Estate Acquisition Division

Justification for Other than Full and Open Competition

Project # 3NJ0246

Mays Landing, NJ

1. Nature and/or description of the action being approved.

To add and to exercise an unevaluated five (5) year, four (4) month firm term, renewal option for 14,302 rentable square feet (RSF), or 13,002 ANSI/BOMA Office Area square feet (ABOA SF) of office space, located at the Hamilton Office Center, 5218 Atlantic Avenue, Mays Landing, New Jersey, for the .

2. Description of the supplies or services required to meet the agency’s needs (including estimated value).

The General Services Administration currently leases 14,302 RSF, or 13,002 ABOA SF, at the Hamilton Office Center, 5218 Atlantic Avenue, Mays Landing, New Jersey, under lease LNJ04363, which expires on May 25, 2016. The current annual rent of the existing lease contract is , which includes shell and operating rates.

The is currently developing their long-term requirements for this office as it relates to their overall housing plan. Due to the pending lease expiration and the lack of long-term space requirements, it is in the best interests of the Government to protect its occupancy by inserting and exercising a five (5) year renewal option with termination rights. This option will provide enough time for both the agency to develop their requirements and for the Government to conduct a fully competed procurement upon receipt of the agency’s requirements. To date, no other extensions or renewals have been completed under the existing lease.

The anticipated renewal term rental rate is , which includes for shell and for operating costs. No tenant improvements will be required as part of the renewal option. The new annual rent for the renewal option is estimated to be including shell and operating costs for the 14,032 RSF of space. The estimated aggregate contract value of the five-year renewal period is

The estimated operating cost is higher than the current operating rental rate of $4.18/RSF because the current rate is considerably below the average market rate for operating costs, and the Lessor states his current operating rental rate does not include the increased operating costs for the supplemental HVAC unit that was installed in the demised space during the lease term. It is anticipated the existing Lessor will request an increase in the operating rental rate that is closer to the current market rate.

3. Identification of the statutory authority

41 U.S.C. 3304(a)(1). Only one responsible source and no other supplies or services will satisfy agency requirements.

4. Demonstration that the proposed contractor’s unique qualifications or nature of the acquisition requires use of the authority cited.

In accordance with 41 U.S.C. 3304(a)(1), the agency’s minimum needs can only be satisfied by unique supplies or services available from only one responsible source and no other type of property or services will satisfy the needs of the agency.

The market in which this office is located has a limited number of available existing buildings, and as the market research shows, the current location offers the lowest rental rate in the delineated area.

If were to locate to a new location, the entire 14,302 RSF would need to be built out to the requirements of the agency. The tenant improvement allowance at a new location is , adding an estimated in amortized tenant improvement costs to the offered rental rate. There is also an estimated cost in the amount to physically move the agency from their current location to a new location and install a new telephone system in the new space.

Due to the tenant improvement allowance required to build out new space and the costs to relocate, it is highly unlikely that another building within the delineated area would be able to offer a rental rate in which the relocation costs would be recovered through competition. In present value terms, the total rental savings of staying in place compared to moving to a new location is

5. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

GSA posted an advertisement seeking expressions of interest on the FedBizOpps website to gauge market interest on April 19, 2016. No expressions of interest were received.

Based on research done in online resources, there is very limited competition in this delineated area and market.

6. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

Based on market research conducted on March 30, 2016 and April 18, 2016, the anticipated renewal option rental rate is comparable to the market rates for the area.

This is not a defined REIS market; however, a search in showed that shell rental rates vary from $12.00 to $22.00/RSF. r did not offer very much operating rent information; therefore, a search in showed operating rates in the surrounding areas ranging from $3.57 to $9.81/RSF. Estimated fully-serviced market rates range from $15.57 to $31.81/RSF. The expected shell rental rate falls within the market range at $15.76/RSF, and the operating rate is within the market range at $5.65/RSF. The anticipated fully-serviced rate of $21.41/RSF falls within the market range of $15.57 to

$31.81/RSF.

Due to the aforementioned reasons, the anticipated rental rate can be deemed fair and reasonable compared to the advertised market rates.

7. Description of the market research conducted

Market research was conducted on March 30, 2016 and April 18, 2016 via

. One (1) other building offers enough vacant space within the delineated area to satisfy the requirement.

For informational purposes only, a search of an expanded delineated area (15-mile radius of the current building) showed eight (8) buildings for proposed construction, and three (3) existing buildings have sufficient space to potentially satisfy the requirement.

Further investigation would need to be done to determine if the available properties are in a flood plain. Much of this market is in a 100-year or 500-year flood plain. At this time, the agency has not approved an expanded delineated area.

Please see the attached market information for further information.

8. Other facts supporting the use of other than full and open competition

The Government will retain existing termination rights during the renewal period upon 120 days’ written notice to the Lessor.

While the at the Hamilton Office Center was surveyed under the 2010 Tenant Satisfaction Survey and scored the location a 50% tenant satisfaction score, the Facilities Management group at assures GSA they are satisfied with the Lessor’s performance, and there are no major issues with the Lessor’s performance or the building.

Additionally, the building complies with current fire, life safety, and ABAAS codes. The has requested to remain in place while they determine their long-term requirements.

9. List of any sources that expressed in writing an interest in the acquisition

No other source has expressed in writing an interest in the acquisition.

10. Statement of actions the agency may take to remove or overcome any barriers to competition Prior to expiration of the five-year renewal term, a fully competitive lease action, if necessary and appropriate, will be initiated.

Contracting Officer’s certification

I hereby certify that the above information is accurate and complete to the best of my knowledge.

Prepared by:

4/22/2016

X Kristina Dello Lease Contracting Officer, 3PRND Signed by: KRISTINA DELLO

Concurred by:

4/22/2016

X Carrie Vineberg Real Estate Acquisition Division Section Chief,...

Signed by: CARRIE VINEBERG

Concurred by:

4/27/2016

X W.A. Berger Andrew Berger Real Estate Acquisition Division Branch Chief, ...

Signed by: WILLIAM BERGER Approved by:

4/29/2016

X Dorothy Baratta Competition Advocate Signed by: DOROTHY BARATTA

Reviewed for legal sufficiency:

4/29/2016

X Robert J. McCall Robert John McCall (3L) Regional Counsel Signed by: ROBERT MCCALL