REDACTED 8DC2676 JOTFOC.pdf

U.S. GENERAL SERVICES ADMINISTRATION

NATIONAL CAPITAL REGION

OFFICE OF PORTFOLIO MANAGEMENT & REAL ESTATE

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

ESTIMATED TOTAL CONTRACT VALUE: $54,097,823.33

1. IDENTIFICATION AND DISCUSSION OF ACTION BEING APPROVED:

Project Number: 8DC2676 Lease Number: LDC12566

The Federal Emergency Management Agency (FEMA) currently occupies 465,839.47 RSF/ 422,927.95 USF of office and related space in Washington, DC under 2 leases (LDC02139 - 303,546 RSF and LDC12566 - 162,293.47 RSF) as its Headquarters location. These leases will be consolidated into a prospectus level replacement lease under Prospectus No. PDC-06-WA21.

This Justification action specifically concerns LDC12566 under which FEMA occupies 162,293.47 RSF / 147,700.USF of office and related space at 400 C Street, SW, Washington, DC. This particular lease expires January 2, 2021. FEMA has a continuing need to remain in this location under LDC12566 for an additional 6 years and 8 months until August 16, 2027 to ensure continued housing prior to their move to their prospectus level replacement lease. The estimated award date for the replacement lease is January 2023. Design and construction is expected to take 47 to 49 months with a projected occupancy to commence in December 2026 and be completed by February 2027. Approval is requested to negotiate an 80 month extension with the incumbent Lessor of Lease Number LDC12566 without full and open competition for continued occupancy at this leased location. The right to pursue an extension is detailed in GSAR 570.405: Extensions.

2. DESCRIPTION OF SUPPLIES OR SERVICES REQUIRED:

FEMA requires 162,293.47 RSF / 147,700.95USF of office and related space at 400 C St, SW, Washington, DC under LDC12566 at its incumbent location for an additional 80 months to ensure continued housing of FEMA prior to the conclusion of their replacement lease procurement. The extension would be effective as of January 3, 2021 through August 16, 2027. Since this is FEMA’s Headquarters, the Government needs continued housing especially since the Stafford Act has been implemented for the COVID-19 pandemic and national disasters around the country to which FEMA is responding.

Prospectus No. PDC-06-WA21 for the long term procurement was approved by the Senate Environment and Public Works Committee on July 1, 2020. GSA is awaiting approval of that prospectus by the House of Representatives Transportation and Infrastructure Committee. Under this prospectus authority, GSA has interim authority to extend LDC02139 pending completion of the lease consolidation.

The estimated total contract value for the 80 month extension is $54,097,823.33 ($50.00 per RSF x 162,293.47 RSF / 12 months x 80 months).

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. This statutory authority is implemented through GSAR 570.405. In accordance with GSAR 570.405(c)(4), use of the sole source authority is appropriate where the agency occupying the space has encountered delays in planning for a potential relocation to other federally controlled space due to documented organizational, financial, or other uncertainties.

4. DEMONSTRATION THAT THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED:

LDC12566 requires a 6 year and 8 months extension to August 16, 2027 to ensure continued housing of FEMA prior to the conclusion of their replacement lease procurement and build out. LDC12566 is one of two leased locations to be consolidated and replaced under Prospectus No. PDC-06-WA21. FEMA was originally projected to be consolidated to the St. Elizabeths Campus with a federal construction project. However, DHS Headquarters priorities shifted in December 2018. Cybersecurity and Infrastructure Security Agency (CISA), formerly National Protection and Program Division (NPPD), is now going to the campus instead of FEMA. This final decision created a material change on how GSA planned to house a future FEMA Headquarters and created an immediate need for a lease project. GSA prepared a prospectus (PDC-06- WA21) to consolidate the FEMA headquarters. The Prospectus was sent through the 2021 Capital Investment and Lease Program cycle in the Summer of 2019. The Prospectus was approved by the Office of Management and Budget (OMB) on June 4, 2020 and was submitted to GSA’s oversight committees on June 11, 2020. Prospectus PDC-06-WA21 was approved by the Senate Environment and Public Works Committee on July 1, 2020 and GSA is awaiting approval by the House of Representatives Transportation and Infrastructure Committee. Approval of this prospectus will provide interim lease authority to extend LDC02139 pending completion of the lease consolidation.

Currently, GSA is working on a Program of Requirements (POR) for a new FEMA Headquarters that will consolidate FEMA’s occupancy at 400 and 500 C Street. GSA expects the POR to be completed in the summer of 2021. The procurement of approximately 500,000 square feet is expected to take two years due to the size and complexity of the project. Since GSA anticipates that potential offerors may include new construction, the NEPA process may take 6-9 months to complete an Environmental Assessment in addition to the regular procurement schedule which can take up to approximately 18 months. The estimated award date of the replacement lease is January 2023 unless there is protest litigation that might delay this schedule.

After award, design and construction is expected to take 47 to 49 months with a projected occupancy to commence in December 2026 and be completed by February 2027. The projected occupancy takes into account FEMA’s stated requirement that it cannot conduct a move between the months of June through December due to their mission requirements during hurricane season. Decommissioning of the current FEMA leased locations to bring them to a broom clean condition is projected to be completed by the end of June 2027. Two additional months are being requested to account for possible risks such as the Environmental Assessment could take longer, any potential litigation, the installation of Furniture, Fixtures, and Equipment (FF&E) which could exceed the current projected 4 month window, or any move delay due to FEMA not being able to move or tactically plan the move between June through December due to the hurricane season.

Therefore, it is reasonable and in the government’s best interest to pursue a 6 year and 8 month extension of the existing lease to ensure FEMA’s uninterrupted occupancy.

5. DESCRIPTION OF EFFORTS TO SOLICIT AS MANY OFFERS AS PRACTICABLE:

In accordance with GSAM 570.106(d), advance notices of supplemental agreements to leases of real property involving lease extensions under the conditions defined in GSAM 570.405 are not required.

6. DEMONSTRATION THAT THE ANTICIPATED COST WILL BE FAIR AND REASONABLE:

The Lease Contracting Officer and Savills Broker gathered market data from several sources: CoStar, REIS, Savills data, and market knowledge.

On August 27, 2020, CoStar data showed the full service gross rate ranged from $50.00 per RSF to $72.50 per RSF with an average rate of $55.19 per RSF.

On August 21, 2020, the Bullseye Team completed their market research. The Bullseye Team determined the asking rates per the CBRE data range from $54.28 per RSF to $54.30 per RSF with an average of $54.29 per RSF. The asking rates per the REIS data range from $55.37 per RSF to $55.75 RSF with an average of $55.52 per RSF.

The current rental rate for LDC12566 is per RSF (net of electric and water).

In accordance with FAR 6.303-2(b)(7), the Contracting Officer determines by certifying this document that the anticipated cost to the Government of approximately $54,097,823.33 ($50.00 per RSF x 162,293.47 RSF / 12 months x 80 months) is considered fair and reasonable based on the market survey discussed herein.

7. DESCRIPTION OF THE MARKET SURVEY CONDUCTED:

On August 27, 2020, a CoStar market analysis was conducted. The CoStar market analysis identified twelve

(12) potential locations that might meet the agency’s needs in the Washington, DC CEA (See Figure 1).

See Figure 1 below for the results of the market research.

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

810 1 st St, NE CoStar

555 4th St, NW, Washington, DC CoStar

700 11th St NW, Washington, DC CoStar

1125 15th St, NW, Washington, DC CoStar

1111 20th St, NW, Washington, DC CoStar

899 N Capitol St, NE, Washington, DC

600 E St, NW, Washington, DC CoStar

1200 K St, NW, Washington, DC CoStar

1333 New Hampshire Ave, NW, Washington, DC CoStar

1425 New York Ave, NW, Washington, DC CoStar

1299 Pennsylvania Ave, NW, Washington, DC CoStar

1875 Pennsylvania Ave, NW CoStar F

Figure 1: Available Space

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

Not Applicable

9. LIST OF SOURCES THAT EXPRESSED AN INTEREST IN THE ACQUISITION:

Not Applicable

10. STATEMENT OF ACTIONS TO OVERCOME BARRIERS TO COMPETITION:

The prospectus level replacement lease to consolidate FEMA into one leased location is anticipated to be acquired through a full and open competition. The Government has considered the time and cost of moving from the existing location, and the time and cost to build out new space as part of a full and open procurement in proposing this extension to conduct a full and open procurement.

Additionally, consideration has been 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. 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.

Bettina Yeh Date Leasing Specialist

12. CONTRACTING OFFICER CERTIFICATION:

I hereby certify that this justification is accurate and complete to the best of my knowledge and belief and that this extension action is in the Government’s best interest. Agency requirements supporting this justification for other than full and open competition are certified and complete.

Maria Del Carmen Medina Date Lease Contracting Officer

CONCURRENCES:

Barbara Howard-Sisco Date Director, DHS Client Delivery Division

Monica Sias Date Lease Acquisition Officer

Office of Regional Counsel Date

Ivan Swain Date Deputy Director, Office of Portfolio Management & Real Estate

Aimee Whiteman Date Director, Office of Portfolio Management & Real Estate

Miranda Webster Date Competition Advocate

APPROVING OFFICIAL:

Darren J. Blue Date NCR PBS Regional Commissioner