JOTFOC_redacted_GS-09B-97427_6CA0950_DEA_Riverside.pdf

U. S. General Services Administration GSA Region 9

Real Estate Acquisition Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NUMBER: GS-09B-97427

PROJECT NUMBER: 6CA0950

AGENCY NAME: DRUG ENFORECMENT AGENCY (DEA)

LOCATION: 4470 OLIVEWOOD AVE., RIVERSIDE, CA

1. IDENTIFICATION AND DESCRIPTION OF ACTION BEING APPROVED

The General Services Administration currently leases 34,354 RSF / 34,354 ANSI BOMA square feet (ABOASF) of office at 4470 Olivewood Ave, Riverside, CA, including 60 parking spaces for the Drug Enforcement Agency (DEA). The current lease will expire on 6/23/2017. The current full service annual rent for LCA97427 is $1,249,918.87 ($36.38/ RSF). The total amount for a 6 month fully service extension is $624,959.445. Approval is requested to negotiate a six (6) month lease extension to allow GSA time to procure for the new/replacing lease.

2. DESCRIPTION OF SUPPLIES AND SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS

(INCLUDING ESTIMATED VALUE).

The Agency requested a new/replacing lease with 34,354 ABOA. The agency signed OA ACA11695 on 8/16/2016, and GSA established new/replacing lease Project 5CA0868.

This requirement is for continued occupancy of 34,354 ABOA / 34,354 RSF for a six (6) month soft term to commence on 6/24/2017 through 12/23/2017 in order to protect the Government’s occupancy during Tenant Improvement design, construction, inspection and acceptance.

For the 6-month extension, the incumbent Lessor proposed a full-service rent rate of $36.38/RSF or $624,959.44 for the 6 month term that includes 86 covered secured, 18 off-street secured reserved, and 16 outside visitors parking spaces.

The delineated area is:

North Hwy 60/ Hwy 91, East Hwy 91/ Arlington Ave., South Arlington Ave./ Magnolia Ave., West Magnolia Ave. (changes name to Market St.)/ Hwy 60.

3. IDENTIFICATION OF STATUTORY AUTHORITY

41 U.S.C. 3304(a)(1): Only one responsible source and no other supplies or services will satisfy agency requirements.

4. DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR

NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED

GSAM 570.405 (c) FAR 6.302-1, permits contracting without providing a full and open competition when the property or services needed by the agency are available from only one responsible source and no other type of property or services will satisfy the needs of the agency.

5. UNIQUE QUALIFICATION OF PROPOSED CONTRACTOR OR NATURE OF ACQUISITION

REQUIRING 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.

Only the incumbent submitted a lease proposal to GSA and the extension is required to protect the Government’s occupancy prior to award of the new/replacing lease and through TI construction.

GSAM 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. Award to other than the current Lessor for this extension would require relocation of the entire requirement and would cause the agency to incur move and replication costs that would not be recovered through competition. (See Section 10: Cost Benefit Analysis Results)

6. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICAL

In accordance with GSAM 570.106(d), for lease extensions meeting the conditions of GSAM 570.405, advertisement on the Federal Business Opportunities website is not required.

7. DEMONSTRATION THAT THE ANTICIPATED COST WILL BE FAIR AND REASONABLE

In accordance with the Federal Acquisition Regulation (FAR) 6.303-2(a) (7), the Contracting Officer certifies by signing this document that the anticipated cost to the Government of $36.38 RSF/YR for the entire requirement is fair and reasonable. This is based on the market analysis, the short duration and firm term of the extension, inability to locate a responsible source, and further justified if relocation and duplication costs were considered.

8. DESCRIPTION OF THE MARKET ANALYSIS CONDUCTED

The incumbent building at 4470 Olivewood Ave. in Riverside, CA, is a Class A office building. On 3/15/2017, GSA conducted market analysis of Class A office space within the delineated area using CoSTAR and identified three(3) potentially acceptable locations (including the incumbent) that could meet the agency’s needs. Rent data was available for the following buildings:

Address Asking Full Service

Rental Rate Source

4470 Olivewood Aveenue, Riverside, CA (incumbent) $36.38 Lessor 356 14th Street, Riverside, CA $36.14 CoStar 3390 University Avenue, Riverside, CA $44.36 CoStar

Average Rate from Market Analysis = $38.96

The Bullseye report dated 03/27/2017 identified a target rate of $31.00/RSF. However, that only included 65 parking spaces and the current lease includes 60 parking spaces.

The current rental rate per rentable square foot for space suitable for the DEA in Riverside with comparable finishes ranges from $36.14 to $44.36 fully serviced. It is important to note that, the market asking rates in the table do not provide for a warm, lit shell (in contrast, they are typically priced out as a cold, dark shell), therefore these shell rental rates are typically lower than what the Government sees.

Since the space would need to be built out to meet the agency’s needs, the entire general and custom tenant improvement allowance would be exhausted for build-out in the event of relocation.

9. OTHER FACTORS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN COMPETITION.

The lease expires on June 23, 2017 and it is essential that a short-term extension be executed in a timely manner until a new replacing lease can be awarded.

ROCIO CARBAJAL

10. COST BENEFIT ANALYSIS RESULTS

Acquisition of 34,354 Rentable Square Feet (RSF) / 34,354 ABOA SF 6 Month Soft Term

Present Location Alternate Location Annual Full-service Rent @ $36.38/RSF¹ $624,959.44 --- Annual avg. Full-service Rent @ $38.96/RSF² --- $669,215.92 New total build out costs³ $0.00 $2,721,108.87 Relocation costs est.($6.00/ABOA SF) $0.00 $206,124.00 Total $624,959.44 $3,596,448.79 6-month lease savings $2,971,489.35

Notes:

¹$36.38/RSF is derived from the quoted full-service rental rate from the incumbent Lessor for the 6 months ²$38.96/RSF is based on the average from the Market Analysis in Section 8, above ³Total build out costs to replicate includes (Tenant Improvements Allowance, BSAC allowance), from the offer for new/replacing lease project 5CA0868.

The cost of relocating the DEA exceeds the cost of remaining at their current location. The savings to the Government equal $2,971,489.35. Based on this cost-benefit analysis, the Government cannot expect to recover relocation and duplication costs through competition. Therefore, the government intends to negotiate a lease extension and remain at its current location.

11. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION

Not applicable.

12. CONTRACTING OFFICERS DETERMINATION AND CERTIFICATION

By signature on this Justification for Other than Full and Open Competition, the Contracting Officer certifies that the award of a 6-month extension of the current lease for 34,354 RSF is in the Government’s best interest and that this justification is accurate and complete to the best of my knowledge and belief.

Certified:

EDWARD

RODRIGUEZ

Digitally signed by EDWARD RODRIGUEZ DN: c=US, o=U.S. Government, ou=General Services Administration, cn=EDWARD RODRIGUEZ, 0.9.2342.19200300.100.1.1=47001003390534 Date: 2017.05.17 07:28:33 -07'00'

Edward Rodriguez Date Leasing Specialist

Approved:

Digitally signed by ROCIO CARBAJAL DN: c=US, o=U.S. Government, ou=General Services Administration, cn=ROCIO CARBAJAL, 0.9.2342.19200300.100.1.1=47001000481316

Date: 2017.05.16 17:27:53 -07'00'

Rocio Carbajal Date Lease Contracting Officer/ Area Manager