JOFOC Lease Extension V101-08RP-0013 Oakland BH Final.pdf

VHAPG Part 806.3 OFOC Page 1 of 3 Revision: 01 Effective Date: 04/01/23

Veterans Health Administration VHA Regional Procurement Office West

Real Property Leasing, Team 4

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NUMBER: V101-08RP-0013

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

The San Francisco Veterans Health Administration Healthcare System (SFVAHCS) currently leases 15,014 rentable square feet (RSF) / 13,362 ABOA of medical office space at 525 21st Street, Oakland, CA 94612 under lease number V101-08RP-0013. The current lease expires 08/31/2024. Approval is requested to negotiate a lease extension with the incumbent Lessor without full and open competition for continued occupancy at this leased location. The procedures for pursuing a lease extension are detailed in GSAR 570.405: Lease extensions.

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

NEEDS (INCLUDING ESTIMATED VALUE).

The government requires an extension of the current lease for 36 months (36 months firm) to commence on September 1, 2024. The estimated cost of this lease extension is $56.68 per rentable square feet per year for an annual cost of $850,993.52 for year 1 and a total contract value of $2,604,380.57 (2% escalation per year). All calculations are based on a Fully Serviced Lease which includes a built-in Utility Allowance and onsite parking.

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 570.405. In accordance with GSAR 570.405, use of the sole source authority is appropriate when the government experiences a delay in acquiring replacement space.

(X) The government encounters unexpected delays outside of its control in acquiring replacement space;

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 during the extension period. The Department of Veterans Affairs acquired property through the Base Realignment and Closure Act (BRAC) at Alameda Point (Bay Area California). SFVAHCS is to build a hospital which will replace both its Oakland OPC and Oakland BH buildings. The property has undergone numerous delays due to environmental and endangered species studies and concerns. The estimated completion date for the replacement hospital is 9/1/2027. 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.

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Effective Date: 04/01/23

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 is not required for extensions.

6. DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST

TO THE GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market research conducted by the Lease Contracting Officer in Oakland, California, showed the rental rate within the market area ranges from $55.00 to $60.00. Therefore, the proposed rental rate for this lease extension of $56.68 per RSF, for year 1, is deemed fair and reasonable by the VHA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On November 1, 2023, market research was conducted using CoStar. The market research showed the rental rate within the market area ranges from $60.00 Market Rate High to $55.00 Market Rate Low. Market rents used are FS (Fully Serviced) and IG (Industrial Gross)

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

Remaining at the current location under 36-month contract term, avoids a holdover and allows the Government to continue operations without disruption.

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

ACQUISITION.

N/A

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

OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

In advance of an existing lease contract’s expiration, considerations will be given to allow for sufficient time to conduct a full and open procurement. The Government will consider the time and cost of moving from the existing location, and the time and cost to build out new space when deciding whether it is economically advantageous to stay at the existing building or to undergo a competitive action. Additionally, consideration will be given to the customer agency’s mission and security requirements (if applicable) to include limiting any agency space requirements that may be deemed unduly restrictive and thus favor the incumbent. The Government will remain conscious of the effort to continuously encourage competition when practicable.

11. CONTRACTING OFFICER CERTIFICATION.

By signature on this Justification for Other than Full and Open Competition, the VHA Lease Contracting Officer certifies that the award of a lease extension of 36 months is in the Government’s best interest and that this Justification is accurate and complete to the best of the VHA Lease Contracting Officer’s knowledge and belief.

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Effective Date: 04/01/23

__________________________________________ Date_____________________ Cecil R. Wall Lease Contracting Officer, Leasing Branch IV Regional Procurement Office West

12. TECHNICAL REQUIREMENTS PERSONNEL 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______________________ Cecil R. Wall Lease Contracting Officer, Leasing Branch IV

13. Approvals in accordance with FAR 6.304 and OCFM RPPM 2023-01.

a. One Level Above the Lease Contracting Officer (required when the anticipated value of the extension term is above SLAT and exceeds $750K): I certify the justification meets requirements for other than full and open competition.

_____________________________ Date________________________ John Paul Niega Branch Chief, Leasing Branch IV

b. Leasing HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and recommend approval (if over $75 million) or approve ($750K to $75 million) for other than full and open competition.

___________________________________________ Date________________________ John Thomas Associate Executive Director, Office of Real Property Leasing Head of Contracting Activity (HCA)

November 3, 2023

November 3, 2023

CECIL WALL Digitally signed by CECIL WALL Date: 2023.11.03 09:31:00 -07'00'

Cecil R Wall Digitally signed by Cecil R Wall Date: 2023.11.03 09:33:07 -07'00'

JOHN PAUL

NIEGA

Digitally signed by JOHN

PAUL NIEGA

Date: 2023.11.03 11:34:57 -07'00' vacostockb Line

VACOThomaJ6 Typewritten Text November 22, 2023

JOFOC Lease Extension V101-08RP-0013 Oakland BH v1