6100 EB JOFOC_redacted.pdf

PDF 411 KB Posted Aug 12, 2020

Attached to: Lease Extension for 6100 Executive Blvd, Rockville, MD
Solicitation number: HHSN2922007000099L
Issued by: Department of Health and Human Services National Institutes of Health Construction

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Justification for Other than Full and Open Competition

1. Identification of the agency and contracting activity.

Federal agency and contracting activity. HHS. The National Institutes of Health (NIH)

a. Sponsoring organization. Office of the Director, Office of Research Facilities, Office of Acquisitions, Real Estate Contracting Branch (OD/ORF/OA/RECB)

b. Project Officer Information. N/A

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

a. Acquisition purpose and objectives.

The proposed lease action will support a twenty-four (24) month lease extension from February 2, 2020, through February 1, 2022, of 44,942 rentable square feet (RSF) under NIH direct lease number HHSN292200700099L, located at 6100 Executive Boulevard, Rockville, Maryland 20852. This lease extension authority is granted for general purpose space (office space) pursuant to GSAM 570.405 (c)(1), Lease extensions.

Section (c), “FAR 6.302-1 permits contracting without providing for full and open competition when the property or services needed by the agency are available from only one responsible source and no other type of property or services will satisfy the needs of the agency. This authority may apply to lease extension in situation such as, but not limited to, the following:

Subsection (1): The agency occupying the leased space is schedule to move into other Federally controlled space, but encounters unexpected delays preparing the new space for occupancy.

The lease contract awarded by NIH at 6100 Executive Blvd needs to be extended to align with substantial completion of newly leased and buildout space procured under congressional authority PMD-01-WA14 and PMD-03-WA14 by General Service Administration (GSA) located at 6701 and 6705 Rockledge Drive. Upon substantial completion and occupancy of replacement space, NIH will terminate and closeout the lease at 6100 Executive Blvd.

Due to design and construction delays at 6701 and 6705 Rockledge Drive it is required to extend the lease at 6100 Executive Blvd under NIH lease contract HHSN29220700099L through February 1, 2022. If the lease is not extended, then the Government will be in an adversarial holdover status and likely claims against the Government will follow.

b. Project background.

NIH currently leases 44,942 RSF of office and support space occupied by the Office of Director (OD) at 6100 Executive Boulevard, Rockville, Maryland under lease number HHSN292200700099L. The lease was initially awarded for a 15-year term through full and open competition, with rent commencement date of February 2, 1999 and expiration date of February 1, 2014.

Prior to lease expiration of February 1, 2014, NIH requested GSA to perform a prospectus lease procurement on its behalf. The purpose of the prospectus lease action was to combine a total of ten NIH and GSA lease contracts at five different locations into one congressional approved prospectus lease action. 6100

Executive Blvd lease contract is one of the ten leases included in the prospectus lease procurement.

The lease at 6100 Executive Blvd. has been extended for two consecutive three-year terms: the first extension from 2/2/2014 to 2/1/2017, second from 2/2/2017 to 2/1/2020, and proposed 3rd extension for a 2-year term from 2/2/2020 to 02/01/2022.

On September 15, 2016, GSA awarded 3 lease awards to support the congressional approved lease procurement. These GSA lease awards are for a 15-years term, contract numbers GS-11P-LMD00153, GS-11P-LMD00158 and GS-11P-LMD00152 located at 6705 Rockledge Drive and 6701 Rockledge Drive, Bethesda, Maryland, 20817. GSA had initially anticipated substantial completion for these leases by the end of November 2020. Due to complications in the design phase, construction delays occurred. These design issues have been resolved and the revised construction schedule anticipates substantial completion end of November 2021 and relocation from 6100 Executive Blvd will occur between December 2021 through January 2022.

With unforeseen delays, occupants at 6100 Executive Blvd will not be able to relocate into their new space until after November 2021. NIH lease contract HHSN292200700099L will need to be extended from 02/02/2020 through 02/01/2022. This additional extension will allow adequate relocation alignment of GSA’s new anticipated substantial competition date and allow NIH sufficient time to relocate and close out the lease contract at 6100 Executive Blvd.

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

a. Project title. Lease Extension at 6100 Executive Boulevard, Rockville MD, 20852

b. Project description. See 2 a. and b. above

Requirement type.

Research & development (R&D) R & D support services Support services (non-R&D) Supplies/equipment Information technology (IT) Construction Architect-engineer (A & E) services Design-build

X Other (specify): Leasehold

Type of action.

New requirement Follow-on

X Other (specify): Lease Extension

Proposed contract/order type.

X Firm-fixed-price Other fixed-price (specify, e.g., fixed-price award-fee, fixed-price incentive-fee): __________ Cost-plus-fixed-fee

Other cost reimbursement (specify, e.g., cost-plus-award-fee, cost-plus-incentive-fee): ___________

Time and materials Indefinite delivery (specify whether indefinite quantity, definite quantity, or requirements): ___________ Other (specify): ___________ Completion Form Term form

Acquisition identification number. HHSN292200700099L

c. Total estimated dollar value and performance/delivery period.

Estimated dollar value: $2,426,868.00= ($27.00 RSF x 44,942 RSF) x 2 (years)

Period of Performance: February 2, 2020 through February 1, 2022

4. Identification of the statutory authority permitting other than full and open competition.

X This acquisition is conducted under the authority of 41 United States Code (U.S.C.) 253(c) (1) as set forth in Federal Acquisition Regulation

(FAR) 6.302-1, GSAM 570.405.

This acquisition is conducted under the authority of section 4202 of the Clinger-Cohen Act of 1996.

This acquisition is conducted under the authority of the Services Acquisition Reform Act of 2003 (41 U.S.C. 428a).

5. Demonstration that the proposed contractor(s) unique qualifications or the nature of the acquisition requires use of the authority cited.

a. Name and address of the proposed contractor(s).

6100 EXECUTIVE, LLC

507 N. Frederick Avenue Gaithersburg MD 208772506.

b. Nature of the acquisition and proposed unique qualifications of the contractor(s).

FAR 6.302-1 only one responsible source and no other supplies or service will satisfy agency requirements; and GSAM 570.405, Lease Extensions. This lease extension is necessary to allow GSA enough time to buildout the new space and relocate under congressional authority lease awards, by GSA.

Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable. Indicate whether a FedBizOpps notice was or will be publicized as required by FAR Subpart 5.2 and, if not, which exception under FAR 5.202 applies. In accordance with GSAM 570.106(d) a lease extension is not required to be posted in FedBizOpps prior to award. A post award notice will be advertised.

Determination by the Contracting Officer that the anticipated cost/price to the Government will be fair and reasonable.

Based on a market survey conducted on July 1, 2019 and economic factors the has determined that a negotiated rental rate estimated $27.00/RSF is fair and reasonable for Class B building.

The comparison grid below details 3 potentially acceptable locations that could meet the requirements of NIH within the delineated area. If move and replication costs are amortized into the lease at an alternate location for 24 months, all locations other than the current location would be significantly higher.

Location Rentable Sq. Ft.

Rate

RSF

Annual Rent Move

Replication Costs/RSF

Total Rate

RSF

Proposed New Annual Rent

24 Months Lease Extension with

Move & Replication Costs

Current Location

44,942 $27.00 $1,213,434.00 $0.00 $27.00 $1,213,434.00 $2,426,868.00

5635 Fishers Ln, Rockville, MD

44,942 $29.00 $1,620,007.50 $48.91 $77.91 $3,501431.22 $7,002,862.44

801 Thompson Ave, Rockville, MD

44,942 $30.00 $1,593,450.00 $48.91 $78.91 $4,754,440.24 $9,508,880.49

6116 Executive Blvd, Rockville

44,942 $34.00 $1,805,910.00 $48.91 $82.91 $4,996,900.24 $9,933,800.49

c. Move and duplication costs are expected to be a minimum $4,399,000 or $48.91 RSF per year ($4,399,000 / 2 / 44,972)

d. Lowest priced alternative from the market survey is 5625 Fisher Lane and would yield a total cost of $7,002,862.44 during the 24-month extension. When comparing the current location and the lowest priced alternative and factoring in move and duplication cost the aggregate cost savings to the Government to remain in place is $4,575,994.00. The cost benefit analysis below demonstrates that it would be in the best interest of the government to remain in place, as move and duplication cost could not be recovered at an alternate location.

8. Description of the market research conducted (see FAR Part 10) and the results, or a statement of the reasons market research was not conducted. Market research was performed on July 1, 2019 using the COSTAR Commercial Real Estate Information database. Several alternate locations had the required square footage to meet the Governments requirement. Per market survey below, rates ranged between $29.00 to $34.00. Based on the rates identified below as part of the market survey, the anticipated

Project Number Agency Date

Prepared City State

99L NIH 9/5/2019 Rockville MD

Address 6100 Executive Blvd. Address 5635 Fishers Ln Square Footage (ABOA SF) 37,597 Square Footage (ABOA SF) 37,597 Common Area Factor 1.195361332 Common Area Factor 1.195361332

RSF 44,942 RSF 44,942

Total Term (Years) 2 Total Term (Years) 2 Total Contract Shell (from table) $2,426,868.00 Total Contract Shell (from table) $2,606,636.00 Operating Rate Escalation 0.00% Operating Rate Escalation 0.00% Total Contract Operating (from table) $0.00 Total Contract Operating (from table) $0.00 Total Contract Parking Cost $0.00 Total Contract Parking Cost Total Rental Payments over Term $2,426,868.00 Total Rental Payments over Term $2,606,636.00

Annual Shell Rent Rate (pRSF) Annual Operating Rate (pRSF) Year Annual Shell Rent Rate (pRSF) Annual Operating Rate (pRSF) $27.00 $0.00 1 29.00$ $27.00 $0.00 2 29.00$ -$

Estimate Date 9/5/2019 Estimate Date 9/5/2019 Estimate Total $0.00 Estimate Total $3,017,000.00 Amount to be Amortized $0.00 Amount to be Amortized $3,017,000.00 Lump Sum TI Amount $0.00 Lump Sum TI Amount -$2,773.56 Amortization Rate 0% Amortization Rate 0% Amortization Term 2 Amortization Term 2 Total of TI Amortization Payments $0.00 Total of TI Amortization Payments $3,017,000.00

Estimate Date 9/5/2019 Estimate Date 9/5/2020 Cost based on Estimate $0.00 Cost based on Estimate $480,000.00

Estimate Date 9/5/2019 Estimate Date 9/5/2019 Cost based on Estimate $0.00 Cost based on Estimate $150,000.00

Rent Being Paid in Old Location during Move $0.00

Estimate Date 9/5/2019 Estimate Date 9/5/2019 Cost based on Estimate $0.00 Cost based on Estimate $752,000.00 Description of Other Costs Would not require any new infrustructure setup costs.

Description of Other Costs

Telecommunication and Network Cable Setup.

Total of Rent Payments Over Term $2,426,868.00 Total of Rent Payments Over Term $2,606,636.00 Total of TI Amortization Payments Over Term $0.00

Total of TI Amortization Payments Over Term $3,017,000.00

Lump Sum Portion of TI $0.00 Lump Sum Portion of TI -$2,773.56 Furniture Costs $0.00 Furniture Costs $480,000.00 Total Move Costs $0.00 Total Move Costs $150,000.00

Rent Being Paid in Old Location during Move $0.00

Other Costs $0.00 Other Costs $752,000.00 Aggregate Total Project Cost of Current Location $2,426,868.00

Aggregate Total Project Cost of Lowest Priced Alternative $7,002,862.44

$4,575,994

Other Costs Other Costs

Aggregate Cost Savings associated with Staying in Place

Note: If the aggregate cost savings associated with staying in place is positive and substantial enough based on the LCO's discretion, this CBA is intended to support a

JOTFOC based on GSAM 570.104 and FAR 6.302-1(a)(2)(ii)(A). (A) "Substantial duplication of cost to the Government that is not expected to be recovered through competition."

Summary - Current Location - OFFER/ Estimate Summary - Lowest Priced Alternative - OFFER/Estimate

Move Costs

Formal Cost Benefit Analysis

Furniture CostsFurniture Costs

Current Location Lowest Priced Alternative

Move Costs

Tenant Improvements for Current Location Tenant Improvements for Lowest Priced Alternative

Annual Rent Input Table Annual Rent Input Table

= User Input Required negotiated extension rate at or around $27.00 is slightly below market condition but is expected during this extension period for this class of building.

Market Research:

Any other facts supporting the use of other than full and open competition. As stated in Section 2.b above, the subject lease needs to be extended to allow GSA time to buildout the prospectus leased space. In addition to the economic factors shown in Section 7 above, it would be disruptive to the occupants of this space to move at the expiration of the current lease in February 2020 and then move again into the new GSA prospectus lease.

Listing of sources, if any, that expressed, in writing, an interest in the acquisition.

In accordance with GSAM 570.106(d) the lease extension is not required to be posted in FedBizOpps prior to award.

Statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the required supplies or services. Congressional approval was received in the Spring of 2014 with a delineated area of Suburban Maryland which includes Prince George’s and Montgomery counties, Maryland. The Congressional delineated area is significantly larger than the previous NIH delineated area. A “Full and Open Competition” lease procurement was conducted by GSA for a 15-year term using the expanded delineated area thereby increasing competition. The leases listed in Section 2. B are part of the Prospectus action.

Technical requirements personnel 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.