JOFOC_(6OR0208)_Redacted_Final.pdf

Document Revision Date: 02/03/14

U.S. General Services Administration GSA Region 10 Leasing Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NUMBER: GS-10B-05979

PROJECT NUMBER: 6OR0208

Agency Name: United States Forest Service (USFS)

1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED.

The General Services Administration currently leases 45,943 rentable square feet (RSF) of office and warehouse space at 16400 Champion Way, Sandy, Oregon, under lease number GS-10B-05979 (hereafter, x5979) for the United States Forest Service (USFS). The current lease expires January 23, 2017. Approval is requested to negotiate a one-year extension with the incumbent landlord without full and open competition for continued occupancy at this leased location to provide additional time to perform a full and open solicitation for a long term lease acquisition.

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED.

USFS submitted an initial continuing need letter on April 21, 2015 for 23,645 usable square feet of office and warehouse space.1 To satisfy the USFS mission requirements, the facility must be accessible to the general public and the Mt. Hood National Forest. To meet this requirement GSA initiated a project tasked under the NBC-2 Broker contract to acquire a ten-year lease in the City limits of Sandy, Oregon per USFS requirements.2 The Broker requested expressions of interest for this requirement by a Federal Biz Ops (FBO) advertisement published on January 11, 2016.

Subsequently, USFS developed a plan to consolidate its Estacada operation, housed in a delegated lease, with its Sandy operation to provide greater efficiency and a more competitive procurement. After requirements were amended to increase square footage to a maximum of 39,950 usable square feet, another advertisement was published in FBO on July 6, 2016.

A third FBO ad was published on August 18, 2016 expanding the

1 The 23,645/ABOA USF requirement consisted of 18,692/SF of Office and 4,953/SF of Warehouse.

2 See project 4OR0231.

delineated area to include both the city limits of Sandy and Estacada. See Section 4 below for a more detailed description of the changes in requirements and impact on this request for a one-year extension. This extension provides additional time required to procure a long term lease.

This requirement is for 39,950 ABOA / 45,943 RSF of space for a one-year term to commence on January 24, 2017. The estimated total cost of this lease is /RSF per year for a total contract value of $765,410.38.

3. IDENTIFICATION OF STATUTORY AUTHORITY.

41 U.S.C. 3304(a)(1): The property or services needed by the executive agency are available from only one responsible source and no other type of property or services will satisfy the needs of the executive agency.

4. DEMONSTRATION THAT THE ACQUISITION REQUIRES THE USE OF THE

AUTHORITY CITED.

The statutory authority permitting other than full and open competition is 41 U.S.C 3304(a)(1) and is implemented by the Federal Acquisition Regulation (FAR) 6.302-1 GSAM 570.405(c)(2). Per FAR 6.302-1(a)(2), when only one source is identified that satisfies requirements, full and open competition need not be provided for to meet requirements.

GSAM 570.405(c)(2) provides that lease extensions may be authorized when “the Government encounters unexpected delays outside of its control in acquiring replacement space.” As mentioned in Section 2 above GSA published a pre-solicitation request for expressions of interest in a full an open procurement for 23,645/ABOA SF on January 11, 2016.

USFS was also evaluating options on how to amend the requirement to increase competition. USFS has a delegated 15,000/SF lease located in nearby Estacada, Oregon a rural community approximately 12 miles from Sandy and also serving the Mt. Hood National Forest. USFS evaluated the opportunities to consolidate the Sandy and Estacada operation into a single requirement. The square footage requirement was increased to 45,943/RSF and the advertisement was amended and published on July 6, 2016.

Subsequent to the July 6, 2016 amendment to the advertisement, USFS elected to modify its delineated area to include Estacada along with Sandy to increase competition. A third advertisement amendment was published in Fed Biz Ops on August 18, 2016 seeking expressions of interest for a June 2017 occupancy within the city limits of Sandy or Estacada, Oregon.

The procurement delays caused by the unforeseeable withdrawal of interest from the incumbent on April 12, 2016 and the related re-evaluation of requirements, and Estacada/Sandy consolidation planning has caused delays to the long term procurement and a 1 year extension is required.

This one-year extension is supported by the cost-benefit analysis below.

SEE NEXT PAGE (PAGE 4) FOR COST BENEFIT ANALYSIS (CBA)

Cost-benefit Analysis Acquisition of 45,943 Rentable Square Feet (RSF)

One-Year Analysis:

Present Location

16400 Champion Way Alternate Location Market Average

One-Year Rent / annual RSF rate (excluding TIs)

$765,410.381 $765,410.382

New Tenant Improvements (amortized at over 1 years)

Cost of physical move including voice and data

( / RSF)

Parking - $0/space/year Total contract price

Total contract savings $1,833,007.16

1 Incumbent extension rate is estimated to be blended rate of RSF. This blended rate consists of a weighted average assuming of Office and for Warehouse. This excludes a tenant improvement allowance. Existing rate is which has been in effect since February 1, 2001. Note that the existing rate is all inclusive of the 32,248 ABOA SF of office space and 7,702 ABOA & RSF of warehouse space.

2 Market Rate calculations in the CBA table are derived from a blended rate of accounting for both an Office and Warehouse use with a TI incorporated. The TI is broken out separately for purposes of this CBA.

3 The relocation Tenant Improvement Allowance assumes a full General and Custom allowance for the office space of and ) respectively. The warehouse use would only receive a General TI Allowance of $58,798.61

The total combined TIA would yield when amortized at over one-year yields a total TI Cost of 4 Incumbent Lessor provides (220) parking spaces as part of the lease agreement at no additional cost. This is common in a rural location where surface parking is generally provided at no additional rental cost.

5 (60) reserved/secured parking spaces are required, with an additional (132) public parking spaces within ¼ walkable mile of the building. Due to its rural location we are assuming that the

(60) reserved/secured parking spaces will be provided at no additional rental cost.

6 This only represents a relocation scenario contract cost at a one-year snapshot to provide a more comparable evaluation.

The cost of relocating USFS using our market analysis (see Section 7, below) exceeds the cost of remaining at 16400 Champion Way. The savings to the Government is $1,833,007.16. Based on this cost-benefit analysis, the Government cannot expect to recover relocation and duplication costs through competition during the extension term.

Therefore, the Government intends to negotiate an extension and remain at its current location.

5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS

PRACTICAL.

Not applicable for this extension action.

6. DEMONSTRATION THAT THE ANTICIPATED COST WILL BE FAIR AND

REASONABLE.

In accordance with Federal Acquisition Regulation (FAR) 6.303-2(a) (7), the Contracting Officer determines by certifying this document that the anticipated cost to the Government of $765,410.38 for the entire requirement is fair and reasonable.

The proposed rates by the incumbent are supported by market research to be fair and reasonable. The proposed action saves the Government approximately $1,833,007.16.

7. DESCRIPTION OF MARKET SURVEY CONDUCTED.

Market research was conducted in order to determine the market rate range for similar office and warehouse space in Sandy, Oregon.

owever, the following are the most comparable properties available to derive market rates. See Exhibit A for a more detailed presentation of market research and analysis.

Building Name Building Address Rate/RSF 333 SE 223rd 333 SE 223rd, Gresham, OR Gresham Corp. Ctr. 1550 NW Eastman Pkwy, Gresham, OR Average

Warehouse Use:

3 is the quoted full service rate in Co-Star for this Class B property. This rate has been adjusted to be comparable for this procurement analysis to as the Costar rate reflects a semi-rural Class B property, Full Service Rate, and excludes TIs. This lease reflects an Operating Expense rate net of electric and water. Rate has been adjusted as follows:

Shell Adjust. The Shell Adjustment also accounts for Broker market input informing the USFS Sandy Long Term Procurement Negotiation Objectives.

4 is the quoted full service rate in Co-Star for this Class B property. This rate has been adjusted to be comparable for this procurement analysis to the Costar rate reflects a semi-rural Class B property, Full Service Rate, and excludes TIs. This lease reflects an Operating Expense rate net of electric and water. Rate has been adjusted as follows:

GSA Shell Adjust. The Shell Adjustment also accounts for Broker market input informing the USFS Sandy Long Term Procurement Negotiation Objectives.

5 This Average is adjusted for the CBA above by eliminating the TIA and assuming a weighted average of for Office and Warehouse.

Building Name Building Address Rate/RSF Eagle Industrial Park 16600 SE 362nd Dr., Sandy, OR.

Recommended Rate

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

COMPETITION.

Not applicable.

9. LIST OF SOURCES THAT EXPRESSED INTEREST IN THE ACQUSITION.

Not applicable.

10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION.

GSA is executing a plan to solicit a long term lease action to meet this requirement that is competitive under project 4OR0231 with a projected Occupancy Date of January24, 2018.

6 is the quoted Co-Star rate but it is quoted NNN. This rate has been adjusted to a full service Class A warehouse rate of accounting for a rate net of electric and water. Note that there are no other comparable properties to draw data from as this is a rural location. This rate is consistent with general market conditions.

11. PREPARED BY*

________________________________________ Date______________________ Eric Shreves, Lease Contracting Specialist

12. TECHNICAL REQUIRMENTS 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.

________________________________________ Date______________________ Eric Shreves, Leasing Specialist

13. CONTRACTING OFFICER CERTIFICATION*

By signature on this Justification for Other than Full and Open Competition, the Contracting Officer certifies that the award of an extension of 45,943 rsf is in the Government’s best interest and that this justification is accurate and complete to the best of my knowledge and belief.

__________________________________________ Date_____________________ Frances Manning, Contracting Officer

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