5A JOFOC_Redacted.pdf

Justification for Other Than Full and Open Competition

U.S. General Services Administration

GSA Region 10

Leasing Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Project Number: 0AK2158

Agency Name: HUD Office of the Secretary

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

The General Services Administration currently leases 12,458 ANSI/BOMA (ABOA) square feet (SF) / 14,805 rentable square feet (RSF) of office space at 3000 C St, Anchorage, AK under lease number LAK06574 for the HUD Office Of The Secretary. The current lease expires 12/31/2023. Approval is requested to negotiate an added lease renewal with the current Lessor without full and open competition for continued occupancy at this leased location. The procedures for pursuing an added lease renewal 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).

The HUD Office of the Secretary submitted a continuing need letter on 12/16/2020 requesting that GSA renew 12,458 ABOA / 14,805 RSF of office and related space and forty-four (44) structured parking spaces for a 5-year term to commence on 01/01/2024.

The delineated area is the Anchorage Central Business District and mid-town. There is no vacant Federal Space available to house HUD at this time. HUD’s long-term strategy is to have their 27-30 employees and contractors stay in place to avoid replication costs and disruption to their day-to-day operations.

Regarding requirements, the HUD Office Of The Secretary’s preference is to be located on one floor, but if space is on multiple floors, it must be contiguous. HUD’s space cannot be located on the first floor or storefront of a building. The HUD Office Of The Secretary is not restricted from occupying space with lobby area surveillance cameras on the tenant-occupied floor(s) if cameras are in public space. The HUD Office Of The Secretary requires high density file storage. Column spacing cannot be less than 20 feet.

The HUD Office Of The Secretary requires a freight elevator for deliveries preferably near the mailroom and bulk storage. As for security, the HUD Office Of The Secretary requires FSL 2 at a minimum and access-controlled reserved parking in an adequately lit parking garage connected or adjacent to the building. Public transportation must be within a certain walking distance of building.

As per the OATool, general and custom tenant improvements for the HUD Office Of The Secretary for 12,458 ABOA SF of office space in Anchorage, AK total up to $ ; BSAC for FSL 2 would total up to $ at $ per ABOA SF.

3. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION.

In accordance with GSAR 570.401, use of the sole source authority is appropriate where it is determined that award to any other offeror 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.

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 the HUD Office Of The Secretary to incur move and replication costs that would not be recovered through competition. Relocation costs are estimated to be $ . Additionally, this allows the Government to make use of existing tenant improvements, avoiding replication costs starting at $ . The FSL level of special security requirements would have to be replicated if the agency were to move. A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6. The cost of relocating the HUD Office Of The Secretary exceeds the cost of remaining at 3000 C Street. The anticipated savings to the Government is $481,134.00.

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

SOURCES AS IS PRACTICABLE.

Per the requirements of GSAR 570.401, the GSA Lease Contracting Officer placed an advertisement on the Contracting Opportunities domain of SAM.gov on 3/9/23 for 7 days. In addition, PBS conducted market research using Costar and LoopNet.

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

FAIR AND REASONABLE.

Recent market surveys conducted by PBS in Anchorage, AK, showed the rental rate within the delineated area ranges (CoStar and LoopNet):

Source Building Name

Building Address

Space Type/Location

Building Class

SF

Offered Term Shell Rate

($/SF/YR)

Rent Type Notes

LoopNet Bayshore Mall

1920 W Dimond Blvd

Office/Retail/ 1st Fl Unknown 22,500 Negotiable $ TBD

Does not meet requirement

LoopNet Northern

Lights Center

1200 W Northern Lights

Blvd

Storefront Retail/Office/1st

Fl Unknown 15,450 Negotiable $ MG “

LoopNet CoStar

3000 C Street 3000 C St Office/2nd Fl A 12,490 3-10 Years $ FS Free

Parking

CoStar ASRC Building 3900 C St Office/5th Fl A 18,942 Negotiable $ FS No Parking

Available

CoStar Wells Fargo

Bank Building

301 W Northern Lights

Blvd Office/2nd Fl A 24,942 Negotiable $ FS

Free Parking but not enough structured spaces available

LoopNet CoStar

Key Bank Plaza 601 W 5th Ave Office/Bsmt A 12,000 Negotiable $ FS

Space is not above-grade.

REXUS 3000 C

Street1 3000 C St Office A 14,805 Exp.

12/31/23 $ FS Free Parking

Incumbent 3000 C Street2 3000 C St Office A 14,805 5 Years $ FS Free

Parking

Incumbent Key Bank Plaza3 601 W 5th Ave Office A 89,000* 10 Years $ FS $200/space/ month Figure 1: Market Research Comparable

1Incumbent’s current Building/Annual Rent.

2Incumbent’s asking annual rate for the added renewal eff. 1/1/24 – 12/31/29.

3Under new lease negotiation with an oil drilling company; % yearly escalations starting Year 1.

*Space not publicly advertised on LoopNet.

Because the proposed annual rent for this lease renewal of $ , or $ per RSF, is within the current market range for this submarket, it is deemed fair and reasonable by the GSA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

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.

On 3/9/23, PBS conducted market research using CoStar and LoopNet and identified 2 potentially acceptable locations (1 plus the incumbent) that might meet the agency’s needs within the delineated area. The 3000 C Street Building and the Wells Fargo Bank Building are located on floors other than the first and are not storefronts, as required by HUD. In addition, PBS posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on 3/9/23. The incumbent Lessor’s expression of interest indicated that the rate would be $ per RSF. The average shell rate from the table above is $ per RSF.

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

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

According to the Expiring Lease Briefing Checklist for this lease, this location was one of the hardest affected spaces during the November 2018 earthquake because it destroyed HUD’s office furniture and revealed nothing was seismically braced. HUD underwent repainting and carpet replacement, acquired new office furniture (October 2020), and replaced the existing access control with their own HSPD12 system, which cost the agency $584,000.00. The FY19 Tenant Satisfaction Survey (TSS) results were 100% overall satisfaction. A fire protection and life safety as well as environmental check was done through IRIS, and no open conditions were found.

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

None.

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 award of a lease renewal of 14,805 RSF 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.

_____________________________________ Date_____________________ 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.

_________________________________ Date______________________ Lease Contracting Specialist

CONCURRED BY

_________________________________ Date______________________ Supervisory Lease Contracting Officer

___________________________________ Date______________________ Lease Acquisition Branch Chief

APPROVED BY

________________________________ Date______________________ Competition Advocate

REVIEWED BY

____________________________________ Date______________________ R10 Legal