Redacted JOFOC 5MI0181 9-9-24.pdf

Revised 10-23-2023

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: 5MI0181

Agency Name: U.S. Customs and Border Protection (CBP)

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

The General Services Administration currently leases 1,150 ABOA / 1,322 rentable square feet (RSF) of office space at 4950 W. Dickman Road, Battle Creek, MI 49037 under lease number GS-05B-17967 for the CBP. The current lease expires 08/31/2024. 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).

CBP submitted a continuing need letter, most recently on 01/10/2024 for 1,322 rentable square feet of office and related space. To satisfy the CBP’s mission requirements, the facility must be proximate to the Battle Creek, MI bonded warehouse.

This requirement is for 1,150 ABOA/ 1,322 RSF of space for a 10-year, 8-year firm term to commence on 06/04/2024. 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: North: E. Augusta Drive and Rte.89 (Michigan Ave.); South: I-94; East: I-194 and Rte.66 and Rte.89 (Michigan Ave.); West: S.35th Street and Rte.96 and E. Augusta Drive. There is no vacant Federal Space available to meet this requirement.

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 CBP 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 . A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6. The cost of relocating CBP using the low cost quote exceeds the cost of remaining at 4950 W. Dickman Rd., Battle Creek, MI. 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 02/07/2024 for 20 days. In addition, LS Theodore Prillaman conducted market research using CoStar and CREXI on 01/30/2023, 02/13/2023 and 1/30/2024.

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

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market surveys conducted by LS Theodore Prillaman in Battle Creek, MI showed the rental rate within the delineated area ranges from per RSF when using the Agency’s full TI allowance. This data was derived from CoStar, CREXI, market knowledge, and GSA pricing policy. Net of TI, recent market research conducted by LS Theodore Prillaman in Battle Creek, MI showed the rental rate in the delineated area ranges from per RSF.

Therefore, the proposed rental rate for this succeeding lease of /RSF for both the firm and soft term of the lease is within the current market range for this submarket and is 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 01/30/2023, 02/13/2023 and 1/30/2024 LS Theodore Prillaman conducted market research using CoStar and CREXI and identified 1 potentially acceptable location (0 plus the incumbent) that might meet the agency’s needs within the delineated area. Although 5 potentially suitable locations were available in the market area of Battle Creek, MI, none of them are within the agency’s delineated area and therefore would not be able to meet the Government’s requirements. The most recent advertisement that PBS has posted, conforming to GSAR 570.402-2 on the Contract Opportunities domain of SAM.gov website was on 02/07/2024. The incumbent Lessor was the only party that responded to this advertisement with an expression of interest. The incumbent Lessor’s expression of interest indicated that the rate would be per 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

4950 W. Dickman Road, Battle Creek, MI 49037 (incumbent)

EOI /RSF

70 Michigan Ave. West, Battle Creek, MI 49017 (lowest priced alternative)

CoStar /RSF

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 and scheduling projections for new paint and carpet, but the lessor has addressed the minor issues and the repainting and recarpeting. The lessor may need to reinstall a drinking fountain in the common corridor. Otherwise, there are currently no outstanding issues. On 02/29/2024, the LAM Abigail Phillips confirmed that 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.

4950 W. Dickman Road, Battle Creek, MI 49037 (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 1,322 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______________________ Theodore Prillaman, Leasing Specialist

See GSAM 506.304(d) and (e) 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.