ACOE_DOL_FASTF_-_Los_Angeles_-_JOTFOC_-_LCA01839_-SLA47_-_2-18-2016_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-01839 Project Number: 5CA0878 Agency Name: Army Corps of Engineers (ACOE), Department of Labor (DOL), and Federal

Acquisition Service Telecommunications Facilities (FAS) Location: 915 Wilshire, Los Angeles, CA (CA6937)

1. Identification and Description of Action Being Approved:

GSA currently has 123,101 RSF/109,985 USF under lease GS-09B-01839 located at 915 Wilshire Blvd., Los Angeles, California. The space is being occupied by three agencies.

1) The Army Corps of Engineers (ACOE) currently occupies 116,737 RSF / 104,299 USF and 32 reserved parking spaces

2) The Department of Labor (DOL) currently occupies 6,063RSF/5,417 USF and 0 reserved parking spaces

3) The Federal Acquisition Service (FAS) 301 RSF / 269 USF 0 parking

Approval is requested to extend this lease for an additional two years to provide sufficient time for the agencies to develop their long term requirement; the action will be a new/replacing lease. The current lease expires May 2, 2018 and has an annual gross rent of $3,747,440.14. An extension will be negotiated at an annual amount below the prospectus level.

2. Description of Supplies or Services Required:

A two year extension of the current lease term is needed in order to gather the final requirements for the Army Corps of Engineers and DOL. The FAS space will be returned to the Lessor and removed from the lease. A two year extension of the current lease term is needed in order to allow the Leasing Specialist sufficient time to conduct a full and open procurement once the requirements are finalized.

Delineated Area:

The delineated area is within the central business area of Los Angeles.

3. Identification of Statutory Authority:

41 U.S.C. § 3304 (a) (1), Only one responsible source and no other supplies or services will satisfy the agencies requirements.

4. Demonstration that the Acquisition Requires Use of the Authority Cited:

GSAM 570.405(c)(2) allows for negotiation with the incumbent Lessor for a lease extension when the Government encounters unexpected delays outside of its control in acquiring replacement space.

Currently the Army Corps of Engineers (ACOE), the Department of Labor (DOL), and Federal Acquisition Service Telecommunication Facilities (FAS) are occupying a total of 123,101 RSF of lease space at 915 Wilshire. A two year extension would give GSA more time to gather the final requirements.

DocuSign Envelope ID: E36F9F2E-00F7-4AEC-9F86-DD85111C5CA5

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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. In this instance, it would be practical and cost efficient for the Government to negotiate a lease extension at the existing location to protect the Government’s occupancy and give GSA more time to gather the final requirements in order to conduct a full open procurement.

The cost of moving and duplicating tenant improvements could not be recovered by conducting a competitive procurement for a two year lease. A market search on LoopNet revealed 1 potential location that could meet ACOE and DOL requirements. However, the cost benefit analysis shows that moving to a new location would cost the Government $7,491,717.68 more than extending the lease at the current location.

In this instance, it would be practical and cost efficient for the Government to negotiate a lease extension at the existing location to protect the Government’s occupancy while GSA fulfills ACOE and DOL long term requirements.

Cost-Benefit Analysis Acquisition of 122,800 Rentable Square Feet (RSF)

Two Year Term Analysis Present Location Alternate Location Total Annual RSF Rate $30.441995922

($3,747,440.14)

New Amortized Tenant Improvements (RSF) $0.00 $4,916,997.96** Security Costs $0.00 Physical Move Costs Paid By Separate RWA $0.00 Telecommunications $0.00 Total annual costs (no escalations included) for 2 Years: $7,494,880.28 Lease Savings $7,491,717.68 --

* Rate based on current market trends.

** Based on TI Allowance of $44.815680/USF or $40.040719/RSF

5. Description of Efforts to Solicit as Many Offers as Practicable:

GSAM 570.106(d) exempts short term lease extensions from the usual advertisement requirements.

GSA conducted market research using buildings within the downtown Los Angeles market on April 14, 2015. Premiere commercial real estate websites that contain comprehensive market information, such as LoopNet and CoStar, were used to determine if there were any buildings that met the requirements of this extension. One building was identified as a possible candidate given the large size of this requirement and the low percentage of vacancy within this market.

6. Demonstration that the Anticipated Cost will be Fair and Reasonable:

In accordance with Federal Acquisition Regulation (FAR) 6.303-2(b)(7), the Contracting Officer determines by certifying 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 comparable on current market trends of 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.

7. Description of the Market Survey Conducted:

On April 14, 2015 a search through LoopNet resulted in the following 1 location, which may be able to meet the agency’s requirements.

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Market Survey Comparable Building Asking Full Service Rental Rate*

*Rate does not include TI cost **Rate based on current market trends

8. Other facts supporting the use of Other Than Full and Open Competition:

None.

9. List of Sources that Expressed an Interest in the Acquisition:

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

10. Statement of Actions to Overcome Barriers to Competition:

GSA will continue working diligently with ACOE and DOL to assist them in completing their agency specific requirements. Once the requirements are finalized, GSA intends to pursue and complete a new/replacing lease action within the requested two year extension term.

11. Contracting Officers Determination and Certification:

By signature on this Justification for Other Than Full and Open Competition, the Contracting Officer certifies that the supporting data used to form the basis of this justification is complete and accurate. In addition, the Contracting Officer certifies that the award of a two year term extension for 122,800 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 BY:

Louie Silva Date Leasing Specialist (9P1PRB)

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12. CONCUR:

Veronica Gonzalez Date Contracting Officer (9P1PRB)

Pedro Zepeda Date Branch Chief (9P1PRB)

Mark Ezersky Date Assistant Regional Counsel (LD9)

Pamela Collins Date Deputy Director of Real Estate Acquisition (9P1PR)

Abdee Gharavi Date Director of Real Estate Acquisition (9P1PR)

Samuel J. Morris, III Date Regional Counsel (LD9)

12. APPROVE:

Tracy Wilmot Date Regional Competition Advocate (9P3PM)