Redacted Justification 8NJ2234.pdf

GENERAL SERVICES ADMINISTRATION

Caribbean and New Jersey Branch, Leasing Division

Justification for Other than Full and Open Competition (JOTFOC)

8NJ2234

Mountainside, New Jersey

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

The General Services Administration currently leases 3,000 ABOA/ 3,451 rentable square feet (RSF) of office space and 12 secured surface parking spaces at the Mountainside, New Jersey 07092 under lease number LNJ23347 for the

The current lease expires 1/1/2022. Approval is requested to negotiate an extension with the incumbent Lessor, without full and open competition, for continued occupancy at this leased location. The current annual rate is per RSF, fully serviced. The Government anticipates being able to negotiate this extension at the rental rate of approximately per RSF.

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

(INCLUDING ESTIMATED VALUE).

This requirement is for 3,000 ABOA / 3,451 RSF of space for twenty-four (24) months, twelve (12) months firm to commence on 1/2/2022 until 1/1/2024. The extension will protect the occupancy of the at the existing leased location and permit adequate time to move into federal space at the Rodino federal building in Newark, New Jersey, which is slated to occur in June of 2023.

GSA’s goal is to negotiate termination rights upon prior written notice. The estimated cost of this lease is per rentable square feet per year for an annual cost of and a total contract value of however, GSA will not extend at a rate that is above the market range.

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 property or services will satisfy agency requirements. This one source is uniquely qualified as the space is immediately available and is already constructed to meet the agency’s requirements with no disruption or associated moving costs.

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. Relocation costs are estimated to be $28,385.26. Additionally, this allows the Government to make use of existing tenant improvements, avoiding replication costs of $208,704.24. A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6. The cost of relocating using the low cost quote exceeds the cost of remaining at The total savings to the Government is $269,913.00.

The current space at in Mountainside, NJ is already constructed to meet s immediate needs. is planning on moving into federal space in June of 2023, and this extension will allow GSA time to coordinate s move to federal space under a new, long term lease. The cost to move and replicate an already existing office for a temporary period would be excessive and not in the best interest of the Government. It is, therefore, in the best interest of the Government to remain at the current location. GSA will continue to work on the move to federal space during this extension period.

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

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

Because this requirement was under 10,000 square feet and fell under the Simplified Lease Acquisition Threshold, no advertisement was needed.

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

THE GOVERNMENT WILL BE FAIR AND REASONABLE.

On 7/15/2021, market research was conducted through and for the Mountainside, NJ area. The report revealed a target rental rate of $29.75 per RSF (attached). A report (attached) was also generated, and resulted in 9 buildings within the town of Mountainside, New Jersey with the available square footage necessary to meet the agency’s requirement. The report showed a market range from $23.00 per RSF to $26.00 per RSF, excluding tenant electric operating costs, or about $26.46 per RSF to $29.46 per RSF fully serviced.

For the purposes of the cost-benefit analysis, the anticipated rental rate to stay in place was estimated at per RSF. The target rental rate of $29.75 per RSF was used as the market comparable.

In addition to this, the full Tenant Improvement Allowance of was amortized over two (2) years at interest, resulting in a total Tenant Improvement expenditure of $221,997.58. The Government would also incur furniture moving costs of approximately $13,703.23, voice and data moving costs of approximately $14,682.03. This equates to a total estimated replication cost of $250,382.84 if the Government were to move to a new location.

The cost of relocating using the rental rate exceeds the cost of remaining at their current location at the anticipated extension rental rate of per RSF. The Government would see an estimated total cost savings of approximately $269,913.00 over the life of the extension term if were to stay in place. Therefore, the proposed rental rates for this extension of RSF is 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 7/15/2021, PBS conducted market research using and identified 9 potentially acceptable locations (10 including the incumbent) that might meet the agency’s needs within the delineated area of Mountainside, New Jersey, with rental rates ranging from from $23.00 per RSF to $26.00 per RSF, excluding tenant electric operating costs, or about $26.46 per RSF to $29.46 per RSF fully serviced. A report was also pulled for the Mountainside, NJ area, and revealed a market target rate of $29.75 per RSF.

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

Figure 1: Market Research Comparables

Address Source Asking Full Service Rental Rate per RSF¹

1450 US Highway 22 W $26.00 + TE ($29.46 fully serviced)

959 S Springfield Ave $23.00 + TE ($26.46 fully serviced)

955 S Springfield Ave $23.00 + TE ($26.46 fully serviced)

430 Mountain Ave $24.50 + TE ($27.96 fully serviced)

420 Mountain Ave Withheld

86-90 Morris Ave Withheld

50 Cardinal Dr $23.50 + TE ($26.96 fully serviced)

¹Market asking rates do not typically reflect the services included in a fully-serviced Government lease. As a result, the market range must be adjusted to reflect a fully-serviced rental rate for a Government lease. To account for a fully serviced Government lease, a rate of $1.46/ RSF is added to asking rates that are TE to account for electricity costs. An estimated $2.00/ RSF was also added to bring the existing space up to Warm-Lit shell conditions required for Government leases. Therefore, the resulting market range is $26.46/ RSF to $29.46/ RSF.

The table below compares the cost of staying in place at the current location at the anticipated rental rate of per RSF with the cost of relocating to a new location at the target rate of $29.75 RSF.

The overarching savings to the Government when remaining in place is an estimated total of $269,913.00 as demonstrated below and referenced in GSA’s Formal Cost Benefit Analysis Excel Document (attached). This table below summarizes the formal CBA.

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

Not applicable.

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

ACQUISITION.

No sources other than the incumbent Lessor expressed interest in this procurement.

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 Lease Contracting Officer certifies that the award of a lease extension for an anticipated rental rate of per RSF is in the Government’s best interest and that this Justification is accurate and complete to the best of the Lease Contracting Officer’s knowledge and belief.

Alanna Fitzpatrick Lease Contracting Officer Date

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.

Bena Parker Realty Specialist Date