13 STANDARD LEASE MODEL GUIDANCE REV 9_30_11.DOCX

Standard Lease Model Guidance (rev 9-30-11) LDG Chapter 2, Standard Lease Model Guidance The Standard Lease Model adopts these solicitation improvements:

The separated solicitation (RLP)—Lease Contract format New and revised general clause versions for standard leases, GSA Form 3517 The documents, consisting of a standard Request for Lease Proposal (RLP) (GSA Form R101C), and Lease Contract (GSA Form L201C), and a new GSA Form 1364C, Proposal to Lease Space, are designed around the particular requirements of standard lease procurements.

The guidance provided here is directed at using the standard lease model to streamline the process for design and construction of TIs when the TI allowance approach is used, while protecting the Government’s interest by facilitating the establishment of reasonable TI pricing.

There is no formal requirement to supply offerors with information setting forth the agency’s interior buildout requirements during the preaward phase of a standard lease procurement. Because of the size and complexity of the TI requirements for which the standard model is most suited, the TI allowance approach anticipates the creation of building-specific Design Intent Drawings (DIDs) and pricing of TIs, based upon information that can best be developed only after a particular building has been selected for award of the lease. The Government only solicits a TI allowance from competing offerors, without a complete scope of work that would be required for fixed pricing of TIs.

Nonetheless, it remains a best practice that the maximum information regarding the agency’s requirements that can be developed before award be provided to Offerors with the RLP. This will increase the probability that the successful Offeror will be able to include a TI allowance sufficient to cover the cost of the agency’s buildout requirements. This will minimize the risk that the construction of TIs will be delayed and hindered by a need to de-scope—or “value engineer” the agency’s buildout—or by the agency’s need to scrape together scarce appropriated funds to provide for increased TI Costs. Neither of these results is conducive to efficient construction of TIs.

Regardless of how fully developed agency requirements are before award, the TI allowance approach is used in recognition of the fact that DID development and TI pricing will be most efficient only after a building is selected. The TI clauses used in the standard lease were designed to transparently lay out in a logical fashion the key activities and milestones in the post award TI process. Section 4 of the Lease Contract, titled “Design, Construction and Post Award Activities,” (which is now standard to the organization of all three lease models), includes a revised clause 4.01, “Schedule for Completion of Space (Jan 2011).

The revised clause shows default schedule durations printed in boldface. The hidden text guidance in the lease model template requires the LCO to carefully evaluate the durations to see that they are appropriate, given the nature of the TI requirement as well as other factors such as the estimating resources available to the agency’s internal review requirements.

This single clause summarizes all of the information that the Lessor needs to know about the nature and timing of its obligations in the post-award TI process. It also summarizes all of the information the Government needs to know about the nature and timing of their obligations to make sure that the post award TI process runs smoothly. The clause gives offerors vital information that allows them to estimate the total time required to complete the TI process, but protects the Government at key milestones by reserving to the Government rights that will allow it to effectively enforce compliance with the lease and conformance of the TI work to the agency’s requirements.

The following other new or revised key clauses in Section 4 of the lease govern the process by which TIs are priced:

These clauses are incorporated into the templates. They take a rational approach to pricing requirements, incorporating realistic but meaningful competition requirements while also allowing for alternatives for determining price reasonableness through mandatory comprehensive pricing data. In order to use this alternate approach effectively, LCOs and their technical advisors will need to familiarize themselves with the newly developed TICS table that adopts the industry standard MasterSpec division of trades. The TICS table is an electronic spreadsheet designed to facilitate evaluation and negotiation of fair and reasonable prices. It is hoped that GSA’s TICS table eventually will become a standard tool with which both GSA and lessors become sufficiently familiar that the TI/Post-Award process will be even less prone to delays.