9NY2743 JOFOC - Redacted.pdf

Justification for Other Than Full and Open Competition, Succeeding Lease

U.S. General Services Administration

GSA Region 2

PBS - Leasing

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 9NY2743

Agency Name: SOCIAL SECURITY ADMINISTRATION

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

The General Services Administration currently leases 31,074 ABOA / 36,573 rentable square feet (RSF) of office space at 123 Williams Street, New York, NY 10038 under lease number GS-02B-LNY23754 for the Social Security Administration. The current lease expires June 28, 2022. Approval is requested to negotiate a 10 year, 5 year firm term 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).

Social Security Administration (SSA) submitted requirements on November 15, 2019, confirmed in a Client Project Agreement (CPA) dated May 30, 2020, for a new/replacing lease action. GSA initiated a competitive lease procurement based upon SSA's submitted space requirements, fully engaging the market. On June 7, 2021, SSA requested that GSA cancel the new/replacing lease action claiming that SSA could no longer predict its space needs because of the pandemic and that, despite entering into the CPA over 21 months ago, SSA lacked funding to complete the new replacing tenant improvements.

Historically, SSA has a tendency to provide direction to GSA on competitive actions and then retract their requests rendering GSA’s timely procurement efforts moot and creating an SSA-created urgency.

Because SSA has given no indication when it may determine its space needs or when it expects to have the necessary funding, PBS believes the best path forward is a 10 year succeeding lease with only a 5 year firm term in order to provide SSA an opportunity to budget and determine its long term occupancy needs. GSA intends to seek SSA's long term needs early in the lease term to capitalize on the flexibility of having termination rights. The project has been assigned to Jones Lang LaSalle Americas, Inc. (JLL), “Broker”, under the GSA Leasing Support Services (GLS) Contract to assist with the requirements development phase and the completion of a Succeeding lease action to ensure continued housing for the agency.

This requirement is for 31,074 ABOA / 36,573 RSF of office and related space for 10 years, 5 years firm term to commence on June 29, 2022. The anticipated cost of this lease is per RSF, fully serviced, for an annual cost of and a total contract value of based on the Jones Lang LaSalle (JLL) proprietary research. The current rental rate is per RSF, fully serviced, or per annum.

The delineated area is as follows:

● North: Canal St with West Side Highway to Rutgers St

● South: Battery Park

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● East: Canal St with Rutgers St to FDR Dr to Battery Park

● West: Canal St with West Side Highway to Battery Park

There are federal properties within the delineated area, but no vacant space available to meet the requirement.

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 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 SSA to incur move and replication costs that would not be recovered through competition. The relocation costs are estimated to be Additionally, this allows the Government to make use of existing tenant improvements consisting of barrier wall interviewing stations and building specific amortized capital improvements avoiding replication costs of A formal cost-benefit analysis has been completed following the procedures set forth in GSAR 570.401-6 and attached to this justification. The cost-benefit analysis shows that the cost of relocating SSA using the Bullseye target rate exceeds the cost of remaining at 123 William Street, New York, NY. The total savings to the Government is expected to be over the proposed 10 years, 5 years firm term.

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, the GSA Lease Contracting Officer placed an advertisement on the Contracting Opportunities domain of SAM.gov on February 11, 2022, for 7 days. GSA received one

(1) response to its advertisement, the Incumbent Lessor. In addition, the Broker conducted market research using Costar and local market knowledge.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

The Bullseye target rate for class A buildings is per RSF. The market research conducted by JLL using CoStar and JLL propriety research showed the rental rate in the delineated area ranging from to per RSF. According to the 4th quarter 2021 market statistics, the average direct asking rent, net of electricity, for class A buildings in Downtown Manhattan are per RSF. With the average electric cost at approximately per RSF, the total average for class A buildings including electricity is per RSF. Additionally, the average lease term is 9.3 years with a 10% to 12% step rent increase after the 5th year.

Therefore, the anticipated rental rates for this succeeding lease of per RSF, fully serviced, is within the current market range for this submarket and are deemed fair and reasonable by the GSA Lease Contracting Officer, supported by the attached market research.

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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 January 14, 2022, market research was conducted by using CoStar and Local market knowledge.

The market research identified ten (10) potentially acceptable locations (9 plus the incumbent) that might meet the agency’s needs within the delineated area.

In addition, the Broker posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov on February 11, 2022. There were no expressions of interests received from alternative locations after placing an advertisement on the SAM.gov website.

See Figure 1 below for the results of the market research, including the incumbent.

Address Source [EOI/CoStar, etc.] Asking Full-Service Rental Rate

123 Williams Street, New York, NY 10038 EOI

140 Broadway, New York, NY 10005 Costar/JLL

28 Liberty Street, New York, NY 10005 Costar/JLL

25 Park Row New York, NY 10038 Costar/JLL

100 Pearl Street, New York, NY 10004 Costar/JLL

40 Wall Street, New York, NY 10005 Costar/JLL

100 Wall Street, New York, NY 10005 Costar/JLL

110 William Street, New York, NY 10005 Costar/JLL

100 Broadway, New York, NY 10005 Costar/JLL

120 Broadway, New York, NY 10005 Costar/JLL

Figure 1: Market Research Comparable

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

The incumbent lessor has no outstanding issues which would preclude GSA from engaging the lessor in a succeeding lease transaction.

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

ACQUISITION.

123 Williams Street, New York, NY 10038

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10. STATEMENT OF ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME

ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

In advance of an existing lease contract’s expiration, considerations will be given to allow for sufficient time to conduct a full and open procurement. The Government will consider the time and cost of moving from the existing location, and the time and cost to build out new space when deciding whether it is economically advantageous to stay at the existing building or to undergo a competitive action.

Additionally, consideration will be given to the customer agency’s mission and security requirements (if applicable) to include limiting any agency space requirements that may be deemed unduly restrictive and thus favor the incumbent. The Government will remain conscious of the effort to continuously encourage competition when practicable.

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 succeeding lease of 36,573 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.

Lease Contracting Officer (2PRM)

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.

GSA Authorized Broker Contractor

13. CONCURRED BY:

Leasing Supervisor / Acting as Branch Chief (2PRM)

Lease Acquisition Officer (2PR)

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Leasing Director (2PR)

13. REVIEWED BY:

Senior Assistant Regional Counsel (2L)

14. CONCURRED BY:

Competition Advocate (2P)

15. APPROVED BY:

Regional Commissioner GSA, PBS Northeast & Caribbean Region

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