6CA1011_JOTFOC_Redacted.pdf

GSA Public Buildings Service

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U.S. GENERAL SERVICES ADMINISTRATION

GSA REGION 9

REAL ESTATE ACQUISITION DIVISION

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Lease Number: GS-09B-01757 Project Number: 6CA1011 Agency Name: SSA CDI / SSA ODAR Location: 606 S. OLIVE STREET, LOS ANGELES, CA (CA6772)

1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED.

The General Services Administration currently leases 19,092 RSF/ 16,179 ABOA SF of office space, including 5 reserved parking spaces at 606 S. Olive Street, Los Angeles, California under Lease number GS-09B-LCA01757. The current lease expires on May 01, 2018. Social Security Cooperative Disability Investigations (CDI) and Social Security Office of Disability Adjudication and Review (ODAR) currently occupy the space.

The SSA CDI long-term plan is to move into Federal space. Approval is requested to negotiate a two-year, firm-term lease extension with the incumbent Lessor without full and open competition to allow sufficient time for the Federal building space to be designed and built-out per SSA CDIs long-term requirements.

The SSA ODAR long-term plan is to have a 10 year, 5 year firm new/replacing lease. SSA ODAR is currently in an active procurement but requires an extension with the incumbent Lessor without full and open competition to allow sufficient time for the new leased space to be awarded, designed and built-out per SSA ODARs long term requirements.

2. DESCRIPTION OF SUPPLIES AND SERVICES REQUIRED.

GSA Federal Branch requested SSA CDI to remain at the existing location, retaining 4,798 RSF / 4,066 ABOA SF of office and related space. A two-year extension at the current location is needed to allow enough time for the Federal Branch to complete its design, build-out and to strategically relocate SSA CDI into a new federal lease. SSA CDI’s relocation and extension are part of strategic portfolio planning.

GSA Real Estate is in an active procurement to award a 10 year, 5 year firm new/replacing lease for SSA ODAR for 11,570 USF / 13,305 RSF a reduction from 12,113 USF / 14,294 RSF. A two-year extension at the current location is needed to allow enough time to complete its design, build-out and possible relocation of SSA ODAR. SSA ODARs extension is part of strategic portfolio planning.

Extending both SSA CDI and SSA ODAR within the current lease will extend the lease term to May 01, 2020. The current lease expires on May 01, 2018 and has an annual rent of $660,822.60. Taking into account the short-term extension, the estimated total contract value for a two (2) year extension is

( /rsf).

Delineated Area:

Both SSA CDI and SSA ODARs delineated areas are within the central business area of Los Angeles.

There is sufficient Federal space available for SSA CDI to backfill to meet the agency’s space requirement.

3. IDENTIFICATION OF STATUTORY AUTHORITY.

41 U.S.C. § 3304(a)(1), Only one responsible source and no other type of property or services will satisfy agency requirements.

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4. DEMONSTRATION THAT THE ACQUISITION REQUIRES USE OF THE AUTORITY CITED.

GSAM 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. The incumbent Lessor is proposing the rental rate of . The lowest rate found on CoStar (as indicated below) would be per RSF.

Award to other than the current Lessor would require relocation of both requirements and would cause SSA CDI and SSA ODAR to incur move and replication costs that would not be recovered through competition. Further, the agencies would incur costs for two moves and its mission would be unduly burdened.

The cost of moving and duplicating tenant improvements could not be recovered by conducting a competitive procurement for a 2-year lease. A market search on CoStar revealed (5) potential locations that could meet SSA’s requirements. However, the fully serviced cost benefit analysis shows that moving to a new location and paying the lowest market rental rate would cost the Government more than extending the lease at the current location, in addition to impacting the SSAs office operations during two relocations.

It is in the best interest of the Government, and GSA’s intent, to meet the agency’s needs where practical and most cost efficient. Here, it is practical and cost efficient for the Government to negotiate a 2-year lease extension at the existing location to protect the Government’s occupancy while the agencies long-term federal space and lease space is developed.

* Rate based on the lowest rate of the market survey comparable below.

** Based on TI Allowance of /USF amortized over 2 years at 8% interest *16,179 USF

The cost of relocating both SSA CDI and SSA ODAR using the low cost quote exceeds the cost of remaining at 606 S. Olive Street, Los Angeles. The savings to the Government is approximately

. Based on this cost benefit analysis, the Government cannot expect to recover relocation and duplication costs through competition. Therefore, the Government intends to negotiate an extension of the current lease and remain at its current location.

5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICAL.

GSAM 570.106(d) for lease extensions meeting the conditions of GSAM 570.405 (referenced above), advertisement on the Federal Business Opportunities website is not required.

Cost-Benefit Analysis Acquisition of 19,092 Rentable Square Feet (RSF)

Two Year Term Analysis Present Location Alternate Location Annual RSF Rate Total Rental Rate for 2 Years New Amortized Tenant Improvements Security Costs ( /RSF)

Physical Move Costs ( /RSF) Paid By Separate RWA

Telecommunications (Telephone/Data Cabling

- /RSF)

Total costs (no escalations included):

Lease Savings --

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6. DEMONSTRATION THAT THE ANTCIPATED COST WILL BE FAIR AND REASONABLE.

In accordance with Federal Acquisition Regulation (FAR) 6.303-2(b)(7), the Contracting Officer certifies by signing this document that the anticipated cost to the Government of /RSF per annum including parking for the entire requirement is fair and reasonable. This is based on the market survey comparables that ranged from to for similar space, plus the costs of tenant improvement cost. It is anticipated that the cost for comparable space will far exceed the current rate once TIs are amortized.

Currently there are 3 extension actions being negotiated with the incumbent lessor for 606 S Olive in Los Angeles, CA. One extension is for the Executive Office for Immigration Review (EOIR) for a 1 year extension. The second is for Social Security Administration (SSA) for a 2 year extension. The third is for Immigration and Customs Enforcement (ICE) for a 33 month extension. The rates for each extension vary based on the following extenuating factors as detailed below:

EOIR (1 year extn)-Due to the large square footage of this lease and the fact that the lease does not expire until 1/23/2021, the Government was able to negotiate down a more favorable rate from to for the 1 year extension term. The extension is needed in order to allow enough time for the completion of the design/construction of the EOIR's new space in the Federal building.

SSA (2 year extn)-SSA currently expires 5/1/2018. Currently there is an active procurement for SSA to replace this lease. Since the lessor has submitted a proposal for the new replacing action and believes he will win the new award, the Government was in a better position to negotiate a more favorable rate from to .

ICE (33 month extn)-ICE currently expires 4/22/2018. ICE's long term plans to move into Federal space have been delayed thus there will be no long term leasing action which hindered our ability to negotiate a more favorable rate to the Government. Originally the lessor offered a rate of . Due to our limited leverage on this action, we were only able to negotiate the rate down to per RSF. Based on the market comparable and on the extenuating circumstances surrounding this action, the rate is fair and reasonable to the Government.

7. DESCRIPTION OF THE MARKET ANALYSIS CONDUCTED.

On January 18, 2018 a CoStar market search resulted in the following (5) locations, which may be able to meet the agency’s requirements.

Market Survey Comparables Building Asking Full Service Rental Rate*

1001 Wilshire Blvd.

915 Wilshire Blvd.

445 South Figueroa Street 801 South Figueroa Street 900 Wilshire Blvd.

8. OTHER FACTORS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN COMPETITION.

The Lease expires on May 01, 2018, and it is essential that a short-term extension is secured in a timely manner to allow the build-out of the agency’s long-term requirements in both Federal Space and Leased Space. Award to other than the current Lessor would require relocation of the entire requirement and would cause SSA CDI and SSA ODAR to incur substantial move and replication costs that would not be recovered through competition.

9. LIST OF SOURCES THAT EXPRESSED AN INTEREST IN THE ACQUISTION.

The incumbent expressed interest in keeping the agency tenant in the space.

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10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION.

GSA intends to relocate SSA CDI to Federal space for the new long-term requirement plan. The Leasing Specialist and Federal Branch will have discussions with SSA CDI to ensure that the build-out and the relocation plans are completed in sufficient time prior to the extended lease term expiration.

GSA intends to award a long-term lease contract for SSA ODAR. The Leasing Specialist and SSA ODAR will have on-going discussions to ensure that the buildout and if needed, relocation, are completed in sufficient time prior to the extended lease term expiration.

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11. CONTRACTING OFFICER CERTIFICATION.

By signature on this Justification for Other Than Full and Open Competition, the Contracting Officer certifies that the award of a two-year lease extension for 19,092 RSF is in the Government’s best interest and that this Justification is accurate and complete to the best of my knowledge and belief.

PREPARED/ CERTIFIED BY ____ ______ __________

Brandy Ocker, Lease Contracting Officer Date

CONCUR: ______ _ __________

Veronica Montoya, Area Manager Date

Pedro Zepeda, Branch Chief Date

Initial: __ __________ Jessica L. Escobedo, Lease Acquisition Officer Date

Pamela Collins, Director Date Real Estate Acquisition Division

Initial: _____ __________ Jordan Baker, Reviewing Attorney Date Assistant Regional Counsel

Samuel J. Morris, III Date

Regional Counsel

APPROVED: _____ ________ __________

Tracy Wilmot Date

Regional Competition Advocate

03.01.2018

03.01.2018

03.06.2018

03.06.2018

03.14.2018

03.19.2018

03.19.2018

03.20.2018