8B(2024.06.04)JOTFOC-8CA3545_Redacted (1).pdf

DocuSign Envelope ID: 40EA9E72-0FCA-4952-AE29-8C7011 EA3B05

Justification for Other Than Full and Open Competition, Succeeding Lease

U.S. General Services Administration

GSA Region 9

Pacific Rim Region

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER:

Agency Name:

8CA3545

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

The General Services Administration currently leases 17,447 ABOA SF / 18,000 rentable square feet {RSF) of office space and related space at , Benicia, California under lease number GS-09P LCA for the . The current lease expires February 14, 2025. Approval is requested to negotiate a succeeding lease with the incumbent Lessor without full and open competition for continued occupancy at this leased location. The procedures for pursuing a succeeding lease are detailed in GSAR 570.402: Succeeding Leases.

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS

{INCLUDING ESTIMATED VALUE).

submitted a continuing need letter on August 16, 2019, for 17,447 usable square feet {18,000 RSF) of flex space along with 8 secured surface parking spaces. To satisfy the mission requirements, the facility must have a minimum of 3,000 SF on the 1st floor with an overhead door and drive-in access where the remainder of the space can be on the 2nd floor directly above. No other tenants shall be directly above or below the Government space. The 1st floor space shall have 15-foot clearance for the 3,000 SF.

Minimum column spacing shall be 25 feet. Antenna roof space shall be provided along with 24/7 building access. The space shall also meet the Government's requirements for security.

This requirement is for 17,447 ABOA / 18,000 RSF of space for a 10-year term, with termination rights after 5-years, to commence on February 15, 2025. The estimated cost of this lease is per RSF per year for the 5-year firm term with an annual cost of $ and $ per RSF for the 5-year non-firm term with an annual cost of $ for a total contract value of . The delineated area is the City Limits of Benicia, California.

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

COMPETITION.

41 U.S.C. 3304{a){1): Only one responsible source and no other supplies or services will satisfy agency requirements. This statutory authority is implemented through GSAR 570.402. In accordance with GSAR 570.402, use of the sole source authority is appropriate where it is determined that award to any other offerer 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.

Revised 05-20-2021

DocuSign Envelope ID: 40EA9E72-0FCA-4952-AE29-8C7011 EA3B05

It is in the best interest of the Government to remain at the current location due to the incumbent Lessor being the only Expression of Interest received from the SAM.gov advertisement and there being no other available properties available within the delineated area.

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

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

Per the requirements of GSAR 570.402-4, the GSA Lease Contracting Officer placed an advertisement on the Contracting Opportunities domain of SAM.gov on August 18, 2022, for 22 calendar days. In addition, Cushman & Wakefield conducted market research using Costar and other local sources and did not identify any other alternatives within the Delineated Area.

6. DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recently executed comps for flex type space conducted by Cushman and Wakefield in the Benicia California area (See Exhibit A} showed rental rates for mostly as-is space ranging from $ to $ per RSF Triple Net. There is also a $ per RSF Modified Gross rate. Adding estimated taxes of $ per RSF and Insurance of $ per RSF to the Triple Net rates then provides a range of $ to $ per RSF Modified Gross for year 1. Adding annual 3% escalations make an average comparable 5-year firm term range of $ to $ per RSF Modified Gross.

However, in getting from a Modified Gross rate to the Government's fully serviced rental rate, the costs in providing a warm lit shell must be added. Also, tenant improvements of approximately $ per ABOA SF for repainting, recarpeting, modifications to a chute tank, lighting, and some electrical work would be additional. The Government typically estimates a warm lit shell at $ per ABOA SF. Amortizing this at 8% over the 10-year full term equates to $ per RSF. Amortizing the $ per ABOA SF Tenant Improvements (Tis} at 8% over 10 years equates to $ per RSF. Plus, an additional $ per RSF for operating expenses needs to be considered. This makes the expected range of $ to $ per RSF Fully Serviced for the Government's "fully loaded" lease rental rate for a 5-year firm term.

The current rate for lease number GS-09P-LCA02800 is $ per RSF Fully Serviced. Adding, Tis of $ per ABOA SF amortized at 8% will add $ per RSF for a total of $ per RSF annually as the estimated cost for the 5-year firm term - which is within the estimated range of $ to $ per RSF Fully Serviced.

The 5-year non-firm term rate is estimated to be the anticipated 5-year rental rate of $ per RSF plus a 10% rent bump or $ per RSF.

These adjusted rates for a succeeding lease are within the current market range for this submarket and are therefore deemed fair and reasonable by the GSA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On April 4, 2022, Cushman & Wakefield conducted market research using Costar was not able to identify any potentially acceptable locations within the Delineated Area other than the incumbent Lessor in meeting the agency's needs. In addition, PBS posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on April 20, 2022. The incumbent Lessor's response to a succeeding lease rate was that he "would be willing to keep the same approximate lease rate and expenses with annual CPI increases. The current rate is $ per RSF Fully Serviced. However, Tenant Improvements of $ per ABOA SF amortized at 8% will add $ per RSF for a total of $ per RSF for the 5-year firm term.

See Figure 1 below for the results of the market research of the Benicia, California area and SAM.gov advertisement, including the incumbent (noting that the incumbent was the only available property identified within the Delineated Area}.

Revised 05-20-2021