Houghton JOFOC - Redacted.pdf

Revised 12-06-2022

Justification for Other Than Full and Open

Competition, Succeeding Lease

U.S. General Services Administration

GSA Region 5

Real Estate Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: 1MI2191

Agency Name: (

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

The General Services Administration currently leases 2,438 ABOA/ 2,665 rentable square feet (RSF) of office space at 902 Razorback Dr SUITE 3, Houghton, MI 49931under lease number GS-05P-LMI18911 for the The current lease expires 04/23/2024. Approval is requested to negotiate a 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).

submitted an email confirmation of continuing need on 05/02/2023 for 2,665 rentable square feet of office and related space. To satisfy the mission requirements, the facility must not be located near establishments whose primary operation is the sale of alcoholic beverages, firearms sold/discharged, or where there are tenants related to drug treatment or detention facilities. Additionally, the office must be within 1000 feet of regularly scheduled public transportation (if provided by the municipality). Finally, the space must have a layout where columns size cannot exceed two (2’) feet square; and space between columns and/or walls cannot be less than twenty (20’) feet.

This requirement is for 2,438 ABOA/2,665 RSF of space for a 10-year/5-year firm term to commence on 04/24/2024. The estimated cost of this lease is $ per rentable square feet per year for an annual cost of $ and a total contract value of $ The delineated area is the city limits of Houghton, MI. There is no vacant Federal Space available.

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 to incur move and replication costs that would not be recovered through competition. This allows the Government to make use of existing tenant improvements, avoiding replication costs of $ This includes a supplemental HVAC system for a server and LAN equipment, Roxbury windows, specific electronic security systems, specific furniture requirements, as well as interview stations and conference rooms that provide acoustic privacy. A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6, and is attached to this JOFOC for reference. The cost of relocating using the low cost quote exceeds the cost of remaining at 902 Razorback Dr SUITE 3, Houghton, MI 49931. The total savings to the Government is $

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 09/08/2023 for 28 days. In addition, LS Lauren Calamari conducted market research using CoStar on 06/16/2023.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market research conducted by LS Lauren Calamari in Houghton, MI showed no properties within the delineated area, but expanding past the delineated area to the Upper Peninsula of Michigan average rental rates range from $ $ per RSF when using the Agency’s full TI allowance. This data was derived from CoStar, market knowledge, and GSA pricing policy.

Therefore, the proposed rental rates for this succeeding lease of $ RSF, are within the current market range for this submarket and are deemed fair and reasonable by the GSA Lease Contracting Officer.

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 06/16/2023, LS Lauren Calamari conducted market research using CoStar and identified 1 potentially acceptable location (0 plus the incumbent) that might meet the agency’s needs within the delineated area.

Although locations were available in surrounding areas of the Upper Peninsula, none are within the agency’s delineated area and therefore would not be able to meet requirements. In addition, PBS posted an advertisement conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website on 09/08/2023. Additionally, the incumbent was the only party that responded to the advertisement. The incumbent Lessor’s expression of interest indicated that the rate would be

$ /RSF.

See Figure 1 below for the results of the market research and SAM.gov advertisement, including the incumbent.

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

902 Razorback Dr SUITE 3, Houghton, MI 49931 (incumbent)

EOI $ /RSF

Marquette, MI 49855 $ net of TI, $ including TI

Figure 1: Market Research Comparables

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

GSA is in good standing with the current lessor, who satisfactorily meets all of the obligations of the lease. The most recent property inspection report indicated minor issues, but the lessor has addressed them and there are currently no outstanding issues. On 04/11/2023, the LAM confirmed there have been no additional issues with the building that have developed since the last inspection report. The tenant agency is generally satisfied with the space and confirms that it meets their agency needs.

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

ACQUISITION.

902 Razorback Dr SUITE 3, Houghton, MI 49931 (incumbent)

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

ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

There are no systemic barriers to competition. If the agency has a continuing need for space upon lease expiration, GSA will follow all authorities, regulations and policies applicable to lease acquisition. Should there be remaining useful life in the Government’s tenant improvements, the Government will consider the cost of moving from the existing location, and the cost to build out new space when deciding whether to undergo a competitive action.

Additionally, objective scrutiny will be given to the customer agency’s mission and security requirements (if applicable) to eliminate unnecessary agency space requirements that may be deemed unduly restrictive.

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 2,665 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.

Date_____________________ Matthew Sermont, Lease Contracting Officer

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.

Date______________________ Lauren Calamari, Leasing Specialist

See FAR 6.304 for appropriate signature threshold levels.

If Senior Procurement Executive (SPE) approval is required, must include signatures from Regional Contracting [Leasing] Director, Regional Counsel, and Head of Contracting Activity (HCA). Use of a separate signature page is required.

Note that the threshold for SPE approval is based on aggregate contract value;

therefore, it is possible that SPE approval may be required for actions below the prospectus threshold.