Sole Source Justification - Redacted.pdf

GENERAL SERVICES ADMINISTRATION REGION 10

PUBLIC BUILDINGS SERVICE

REAL ESTATE ACQUISITION DIVISION

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NO. GS-10B-06653

1. Identification of the agency and the contracting activity (service center)

This justification for other than full and open competition action is being undertaken for COE, EDA, FDA, BLS, and CNS located in the Borah Post Office, 304 N 8th St., Boise, ID 83702-5820. This action is being undertaken by the General Services Administration (GSA), Public Buildings Service (PBS), Northwest/Arctic Region 10, Real Estate Acquisition Division located in the Region 10 Headquarters, 400 15th St. SW, Auburn, WA.

2. Nature and/or description of the action being approved

The action being approved is to negotiate an option to renew into Lease No.

GS-10B-06653. During this action, GSA will execute the option and reduce the amount of RSF in the lease by 1,183. Adding and exercising this option to renew will allow the various agencies located in the Borah Post Office to continue to operate and conduct their missions effectively and efficiently while long term solutions are underway. The lease went into effect on 7/14/2004 and expired 7/13/2009. The lease is currently in holdover.

3. Description of the supplies or services required

GSA will be required to provide a continuation of occupancy for the various agencies that are currently located in the Borah Post Office for a period of one year. In order to accomplish this, a one year renewal option with cancellation rights upon 30 days notice will be negotiated into the existing lease and executed. The RSF in the lease will be reduced from its existing amount to 4,579 RSF, and the annual rent will be reduced.

4. Identification of the statutory authority

41 U.S.C. 253 (c)(1) and FAR 6.302-1. GSAM 570.402-5 (b). Only one responsible source and no other supplies or services will satisfy agency requirements. The attached cost-benefit analysis confirms that the government cannot expect to recover relocation costs and duplication costs through competition.

5. Demonstration that the proposed contractor’s unique qualifications or nature of the acquisition requires use of the authority cited

Lease No. GS-10B-06653 has been in effect since 7/14/2004 and expired 7/13/2009. The lease is currently in holdover status. The agencies located at the Borah Post Office will be moving into various new locations, such as the James A. McClure Federal Building and the Emerald Tech Center in Boise, ID. In order to give GSA adequate time to complete these actions, the lease will need to be renewed for a period of one year with termination rights upon 30 days prior written notice to the lessor. In addition, the current market in Boise, ID cannot provide space which meets the needs of the agencies without a significant increase in overall costs as identified in the cost-benefit analysis (Section 9). Therefore, in accordance with 41 U.S.C. 253 (c)(1) and as implemented by GSAM 570.40 (c)(1), the agencies’ minimum needs can only be satisfied by unique supplies or services available from only one responsible source, and no other type of property or services will satisfy the needs of the agencies.

6. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable

Through market research conducted in October, 2009, it was determined that rental rates in the Boise market range from $17.50/RSF to $17.95/RSF un-serviced. Operating costs range from $4.00/USF to $6.00/USF, and triple net costs are estimated at approximately $2.50/RSF. The average fair market rent for office space in Boise would be approximately $25.30/RSF, fully serviced. Market data is described in greater detail in Section 8, and a cost-benefit analysis can be found in Section 9.

7. Determination by the contracting officer that the anticipated cost to the

Government will be fair and reasonable

In accordance with 41 U.S.C. 253 (f)(3)(c), the contracting officer determines that the anticipated lease cost to the Government of $69,142.90 annually, assuming an offer rate at or below $17.12/RSF, full service, will be fair and reasonable based upon favorable comparison to prices obtained through market research for the same or similar space.

8. Description of the market research conducted

An internet market survey of Boise, ID was performed on 10/1/2009 via Costar, and three properties were identified for the purpose of comparing office space. The following is a summary of the data based upon a five year occupancy of space. These rates do not include the cost of parking.

Mallard Place 9020-9100 W Blackeagle Dr.

Boise, ID 83709

1) Asking: $17.95/RSF + nnn

2) Built in 1998, 1 story, 44,703 SF building

Red Hawk Court 9284-9292 W Barnes Dr.

Boise, ID 83709

1) Asking: $17.50/RSF + nnn

2) Built in 1999, 1 story, 14,052 SF building

Lynx Center 9300-9398 W Overland Rd.

Boise, ID 83709

1) Asking: $17.95/RSF + nnn

2) Built in 1999, 2 stories, 46,000 SF building

Based on this survey, the fair market rents for comparable office space in the Boise market range from $17.50/RSF + nnn - $17.95/RSF + nnn. Based upon additional information gathered during the survey, operating costs are approximately $4.00/RSF - $6.00/RSF, and triple net costs are estimated at $2.50/RSF. Therefore, the fair market rent value for the subject property would be the average rent of $25.30/RSF, comprised of a shell rate of $17.80, an operating rate of $5.00/RSF, and triple net costs of $2.50/RSF. These rates reflect a lease term of five years or more and are inclusive of costs associated with additional security and increased environmental requirements that are required by the Government.

9. Other facts supporting the use of other than full and open competition

Cost-Benefit Analysis

1-Year Lease Term Borah Post Office Alternate Location

Shell Rent $46,247.90 $81,506.20 Operating Expense $22,895.00 $22,895.00

NNN $0.00 $13,697.50

TIA: Existing Space $0.00 $0.00 TIA: New Space @ $38.72/USF $0.00 $177,298.88 Other Expenses *Cost of Physical Move ($4.00/RSF) $0.00 $18,316.00 *Cost of Telephone/Data ($2.00/RSF) $0.00 $9,158.00 Total: Other Expenses $0.00 $27,474.00 Total: Annual Rent $69,142.90 $118,098.70 Total: Cost over 1-year term $69,142.90 $322,871.58 Total: Savings over 1-year term $253,728.68

RSF 4,579

*Cost estimates are averages as provided by GSA

10. List of any sources that expressed in writing an interest in the acquisition

Due to the fact that the Government is exercising an option to renew this lease, no sources expressed interest in the acquisition.

11. Statement of actions the agency may take to remove or overcome any barriers to competition

Exercising an option to renew for a period of one year will allow the various agencies located within the Borah Post Office to continue to operate effectively and efficiently while GSA completes the long term projects. The offered rate of $15.10/RSF, or $69,142.90 annually (full service) for 4,579 RSF of office space is within market range. In addition, due to the short term of the renewal, the offer is fair and reasonable and of best value to the Government.

12. Realty Project Manager/Technical or Requirements Official Certification

Joshua D. Campbell, Lease Contracting Specialist Date

Michael J. O’Brien, Lease Contracting Officer Date