Lease_Extension_JOTFOC_CBP_Newark_NJ_-_LNJ23182_-_4NJ0212_(2)_Redacted_Final.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION (JOTFOC)

U.S. GENERAL SERVICES ADMINISTRATION

REGION 2- LEASING DIVISION -CARIBBEAN & NEW JERSEY BRANCH

LEASE NUMBER:

PROJECT NO.:

PROSPECTUS NO.:

LEASE LOCATION:

AGENCY:

CITY/STATE:

LNJ23182

4NJ0212

PNJ-01-NW16 (Interim Lease Extension) 1100 Raymond Blvd, Newark, New Jersey Department of Homeland Security (DHS) Customs and Border Protection (CSP) Newark, NJ

PROPOSED ACTION: The General Services Administration (GSA) proposes to enter into a four (4) year lease extension for approximately 217,419 Rentable Square Feet (RSF) / 184,801 ANSI SOMA Office Area square feet (ABOA SF) of office space and specialty space, including 30,400 square feet of onsile parking space (66 reserved structured parking spaces) at 1100 Raymond Blvd, Newark, NJ, to protect the occupancy of the Department of Homeland Security (DHS), Custom and Border Protection (CSP). GSA is seeking a four (4) year, two (2) year finn term.

In efforts to optimize overall space utilization at this lease location, the Government seeks to potentially release approximately 10,470 RSF of space located on the first floor.

DESCRIPTION OF REQUIREMENTS (INCLUDING ESTIMATED VALUE): The GSA currently leases 217,419 RSF/184,801 ABOA SF of office and specialty space at 1100 Raymond Blvd, Newark, NJ under Lease LNJ23182, which expires on May 31, 2016. The annual rent under the current lease is $12,040,315.91 or approximately $55.38 per RSF for fully serviced space. The estimated aggregate rental for the lease extension is $48, 161,263.64. GSA has tasked the National Broker Contract (NBC) Cushman and Wakefield to assist in negotiating the lease extension. While we believe the proposed rental rate to be above the market, we have full intention of negotiating a better rate with the assistance of the NBC Broker.

IDENTIFICATION OF STATUTORY AUTHORITY: 41 U.S.C. 3004 (a) (1) Only one responsible source and no other supplies or services will satisfy agency requirements. This one source is uniquely qualified as the space is immediately available and is already constructed to meet both the Agency requirements for the short term and with no disruption or associated moving costs. The economic benefit to remain in the space is to save relocation costs, disruption, and initial build out cost, which is not expected to be recovered through a Full and Open Competition, specifically during the short nun.

UNIQUE QUALIFICATIONS: In spite of GSA making several requests for CBP to submit their space requirements in advance and elevating the request within our organization, the requirements were not submitted by CSP. In an effort to move the new replacing lease prospectus level project along without CBP's requirements, GSA submitted a lease prospectus package with CBP's original lease square footage and the prospectus was rejected.

GSA worked with CSP over the course of several months to reduce their overall square footage to comply with space utilization initiatives. We received CBP's space requirement from CBP in May 2015. The new square footage was submitted and the latest pass-back included a housing plan without a firing range and the prospectus was approved by GSA on September 8, 2015. We started working on the pre-award tasks associated with the long term competitive procurement project, but

The matter is being worked on at a regional level with the assistance of GSA

Region 2, CSP Client Executive as well as at the National level. As a result, we still do not have fully vetted approved requirements for CSP. As part of Prospectus #PNJ-01-NW16, the GSA was given authorization to execute an interim leasing action, as necessary, to ensure continued housing of the tenant agency prior to effective date of the new lease. This is in the best interest of the Government to avert financial risk of holdover tenancy.

CBP's mission is to safeguard America's borders thereby protecting the public from dangerous people and materials while enhancing the Nation's global economic competitiveness by enabling legitimate trade and travel. Its goal is to serve as the premier law enforcement agency enhancing the Nation's safety, security, and prosperity through collaboration, innovation, and integration, !n support of their primary mission of homeland security, the existing operation at 1100 Raymond Blvd, Newark, NJ provides quality scientific, forensic, and Weapons of Mass Destruction (WMD) services to their customers in addition to standard administrative support.

CSP currently houses their Field Operations and Administrative support division at this location.

his not only includes Land Ports of Entry, but it also includes cargo materials secured

Lease Number: LNJ23182, Project Number: 4NJ0212 2 from airports. This location services the greater New York City area including the New York Seaport, JFK Airport, the Port of Newark and Perth Amboy.

The current space has already been altered to accommodate the specialty space and to fully meet CBP's requirements to carry out their mission. The leased space is in good condition and needs no additional improvements for the immediate future. The economic benefit to remain in the space during the short run is to save relocation costs, mitigate any disruption to the critical mission, and alleviate the impact of significant build out cost, which is not expected to be recovered through a Full and Open Competition. It would be a significant challenge seeking to find a suitable alternative space that meets the already established space conditions, without causing disruption to CBP's daily activities, prior to the current lease expiration of May 31, 2016.

DESCRIPTION OF EFFORTS TO ENSURE SOLICITATION FROM MAXIMUM SOURCES

PRACTICAL NA

DEMONSTRATION THAT THE ANTICIPATED COST WILL BE FAIR AND REASONABLE: As represented below in the market data provided by the NBC Broker Cushman and Wakefield, researched in December 2015, the current market does call for a rental rate lower than the proposed fully serviced rental rate of $55.38 per RSF ($12,040,315.91 annual). The current lease is an emergency lease awarded as result of CBP being displaced from the World Trade Center due to the September 11th terrorist events. Therefore, the lease rental rates were established at a time when the Government had an urgent, time-sensitive need to fulfill CBP's unique space requirements. The rental rate of $55.38 per RSF includes costs associated with CBP's above standard equipment which includes additional above standard utilities costs and above standard equipment repair and maintenance costs. It would be very costly and time consuming to temporarily recreate the above standard equipment. The Government has estimated that roughly $38,423,793.93 in Tenant Improvement construction costs and $924,005.00 in move costs would be required to reestablish a suitable alternative space for CBP's operation.

The proposed rental rate of $55.38 is above the market rental rate but a cost benefit analysis, conducted to compare the cost of staying in place for the short term to the cost of moving to an alternate location, reflects a full term savings of $22,312,239.33 (See Cost Benefit Analysis attached). Due to this unique situation the proposed rental rate is considered reasonable because the Government will save significantly on replication cost. The assigned National Broker Contract Broker, DTZ-Cushman & Wakefield and Lease Contracting Officer will make every effort to negotiate a reduced rental rent. The Broker has proaclively itemized each component of the rental rate and it is our intent to have a detailed negotiation with the incumbent Lessor that will result in additional cost savings to The Government.

DESCRIPTION OF MARKET RESEARCH CONDUCTED: On December 29, 2015 market research was conducted by using Cushman and Wakefield local market expertise. The market research identified five (5) potential buildings (excluding 1100 Raymond) within the delineated area that could possibly satisfy the requirement. The advertised asking rental rate range is $21.00 to $34.50.

The Cushman and Wakefield Market Data for Newark, NJ estimate the non-fully serviced quoted rental rate range to be $21.00 to $34.50 per RSF. After making adjustments to account for a fully serviced rental rate including tenant electric and a warm-lit shell, we estimate the resulting adjusted

Lease Number: LNJ23182, Project Number: 4NJ0212 J asking rental rate range to be $26.00 to $39.50 per RSF for fully serviced space in Newark, NJ, averaging $32.75 per RSF. Please reference the below table.

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OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION:

GSA does not have authority to award the long term action. The new replacing lease prospectus number PNJ-()1-NW16 has been approved by The GSA Administrator and the Committee Resolution has been adopted by the House of Representatives. We are currently waiting on the adopted resolution from the Senate. As a result, acquiring a short term lease extension is critical to protecting CBP's existing occupancy and ongoing mission while procuring a longer term competitive solution.

In addition, the long term competitive procurement will require a complete build out of CBP's space along with CBP's unique specialty space, if it proves to be most advantageous for the Government to move. However, if the Government ends up staying in place, it will require major significant renovations with multiple project, because CSP will be significantly reducing their current square footage to meet the OHS space utilization standards.

As a result, the proposed lease extension is the most practical, efficient and timely method of meeting CBP's space needs in support of their mission requirements. By obtaining a lease extension for four (4) years, the Government will gain an adequate amount of time to procure for the follow on lease and CSP can continue their necessary daily operations to fulfill their mission without disruption.

LIST OF SOURCES THAT EXPRESSED INTEREST IN THE ACQUISITION: NA

STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION: The follow on lease has been assigned to a National Broker Contract (NBC} Broker. The NBC Broker is currently working with GSA to conduct a competitive, full and open procurement under Prospectus No. PNJ-01-NW16.

Lease Number: LNJ23182, Project Number: 4NJ0212 4

CONTRACTING OFFICER CERTIFICATION THAT THE JUSTIFICATION IS ACCURATE AND

COMPLETE TO THE BEST OF THE CONTRACTING OFFICER'S KNOWLEDGE AND BELIEF

LNJ23182, Project Number: 4NJ0212 &

4/25/16