JOFOC9MD2398redacted.pdf

U.S. General Services Administration-GSA Region 3

Real Estate Acquisition Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

9MD2398

Federal Emergency Management Agency (FEMA)

Frederick, MD

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

The Government seeks to enter into a five year renewal option for FEMA in Frederick, MD with the incumbent Lessor without full and open competition for continued occupancy at the current lease location.

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

(INCLUDING ESTIMATED VALUE).

FEMA is currently located in 227,548 ABOA (229,459 RSF) of warehouse/office space in GSA lease number LMD06310 which is set to expire on January 31, 2021. This lease houses two functions of FEMA, the Distribution Center (DC) and the Mobile Emergency Response (MERS). The current rental rate is $12.55/RSF (net electric &heating fuels). GSA is in the midst of a competitive procurement for the relocation of FEMA DC’s long term space requirement. The current project schedule anticipates a relocation of this operation in February 2022. Therefore, a short term leasing action must be performed to protect occupancy at the current location in order to avoid a lease holdover situation. The current lease has a 5 years, 2 years firm unevaluated renewal option with cancellation rights in whole or part said notice must be given to the Lessor 180 days’ prior to lease expiration. The agency requires no tenant improvements to their space.

The estimated rental rate for the renewal period is:

Firm Term: $13.32 ($12.50 Shell /$.82 operating) rate/rsf x 229,459 RSF rsf = $3,056,393.88 (Annual Rent) x 2 years = $6,112,787.76 Non-Firm Term: $13.32 ($12.50/Shell / $.82 operating) rate/rsf x 229,459 RSF rsf = $3,056,393.88 (Annual Rent) x 3 years = $9,169,181.64

Estimated Total Contract Value: $15,281,969.40

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. In accordance with FAR 6.302-1 and GSAR 570.402, 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 the Government to incur move and replication costs that would not be recovered through competition for this lease renewal period. A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6 and is attached to this justification and demonstrates an aggregate cost savings to the Government of

$4,460,142.00 by remaining in place. (See attached CBA Analysis) It would not be economically feasible to relocate the agency to a new location for such a short term and exercising a lease renewal will protect occupancy and allow the agency to continue their mission without disruption.

5. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS

MANY POTENTIAL SOURCES AS IS PRACTICABLE

In accordance with GSAM 570.106(d) and 570.405, an advertisement was placed on beta.SAM.gov on July 27, 2020.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

A recent market sweep conducted by GSA in Frederick, MD showed the rental rates within the delineated area for longer term leasing actions range from $12.45-$15.00 (net electric & heating fuels)per RSF excluding tenant improvements.

The proposed rental rate for this lease renewal of $13.32/RSF is deemed fair and reasonable by the GSA Lease Contracting Officer as the rate falls within the established market range.

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 July 22, 2020, Cathleen Ryer, Lease Contracting Officer conducted market research using CoStar and other market data. This research identified no existing acceptable locations and two proposed new construction locations that might meet the agency’s needs within the delineated area. Based on the evaluation of the lowest priced property for comparable market rate purposes, a cost benefit analysis was completed identifying savings of $4,460,142.00 to remain in place.

(See Attached Market Research Report and Cost Benefit Analysis)

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

The agency is satisfied with their current location and lessor’s performance. The GSA Property Manager has confirmed that the Lessor is responsive to the Government’s needs. In accordance with the requirements of GSAM 517.207 (b), the lessor’s performance under this lease has met the Government’s expectations for quality performance.

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

ACQUISITION.

No other source has expressed an interest in writing in this acquisition.

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

ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

Exercising a renewal option provides a short term solution to protect occupancy at the current location while the Government finalizes long term housing plans. The Government is in the midst of a competitive procurement for a portion of this requirement, the resulting new/replacing lease will be awarded under competitive lease procedures.

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 renewal option for 229,459 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.