redacted justification NLRB.pdf

U.S. General Services Administration

GSA Region 2

Northeast and Caribbean Region Leasing Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION – Lease Extension (24 Months)

PROJECT NUMBER: 0NY2620

Agency Name: National Labor Relations Board (NLRB)

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

The General Services Administration (GSA) currently leases 18,590 ABOA / 23,238 rentable square feet (RSF) of office space at 2 Metrotech Center under lease number GS-02B-23468 for the NLRB. The current lease expires September 10, 2021. Approval is requested to negotiate a two-year lease extension with the incumbent Lessor without full and open competition for continued occupancy at this leased location. The right to pursue a lease extension is detailed in GSAR 570.405: Lease Extensions.

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

(INCLUDING ESTIMATED VALUE).

GSA is currently in the initial offer phase of the competitive replacement lease procurement for NLRB under project 7NY2709 consisting of 8,848 ABOA / 11,060 rentable square feet with an estimated completion of August 2024. An estimated two year lease extension is required to secure the NLRB’s occupancy for the duration of project 7NY2709 and permit sufficient period of time for the NLRB to complete a relocation following substantial completion of tenant improvement fit out.

GSA is currently paying the lessor $972,256.30 per year or $41.84/RSF for NLRB at 2 Metrotech Center under the terms of a five year renewal expiring on September 10, 2021. Based upon current market rates in the downtown Brooklyn submarket, a recently awarded GSA lease, combined with the short term nature of the extension, the estimated cost of the lease extension for 18,590 ABOA / 23,238 rentable square feet at 2 Metrotech Center is $52.00 per rentable square feet per year for an annual cost of $1,208,376.00 and a total contract value of $2,416,752.00. This location falls outside of GSA Bullseye market coverage and is excluded from Lease Cost Relative to Market (LCRM).

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.

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 NLRB to incur move and replication costs that would not be recovered through competition. Relocation costs are estimated to be $118,492.00. Additionally, this lease action allows the Government to make use of existing tenant improvements, avoiding replication costs estimated at $1,487,200.00 (or approximately $80.00/USF) which includes replication of hearing rooms and specialized sound attenuated offices and conference rooms for attorneys and administrative judges occupying this location that would all have to be replicated if they were to move. A cost-benefit analysis was completed and is attached to this justification. The cost of relocating NLRB using the low cost quote exceeds the cost of remaining at 2 Metrotech Center, Brooklyn, NY. The total savings to the Government is estimated to be approximately $2,210,932.00.

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

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

N/A

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

THE GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market data obtained from CoStar on 7/29/2021 on comparable buildings and spaces yielded estimated shell and operating rates of $55.27/RSF to $66.86/RSF, all of which exceeds the anticipated rates for the two year lease extension at the existing location.

Therefore, the proposed rental rate for this extension of $52.00/RSF is below the current market range for this submarket obtained through market research, notwithstanding being outside of Bullseye market coverage, 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.

A CoStar search on July 29, 2021 generated several properties which could potentially meet the NLRB’s existing requirement. Further filtering the properties to derive a comparable floor size to 2 Metrotech Center of approximately 30,000 RSF built after the 1970s yielded three properties with asking rates ranging from $44.77 - $56.36 per RSF net of operating costs. An additional estimated $10.50/RSF is required to obtain the full service rate for the comparable market rents thereby increasing the range to $55.27– $66.86/RSF. Additionally, these asking rates do not account for the typical and building-specific GSA shell buildout requirements which are atypical in the commercial office leasing market and would otherwise further increase rates in a typical proposal. The estimated rates for 333-339 Adams Street, the lowest available comparable, is used as the basis of the attached cost benefit analysis.

See Figure 1 below for the results of the market research including the incumbent

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

Rental Rate

2 Metrotech Center, Brooklyn, NY (Incumbent) Recent GSA Lease Award at 2

MTC

$52.00/RSF

(Anticipated rate for

Extension)

Brooklyn Renaissance Plaza, 333-339 Adams Street, Brooklyn, NY

CoStar $55.27-$65.21/RSF (shell/op only)

15 Metrotech Center, Brooklyn, NY CoStar $55.72-$65.77/RSF (shell/op only)

2 Hanson Place, Brooklyn, NY CoStar $56.61-$66.86/RSF (shell/op only)

Figure 1: Market Research Comparables

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

The proposed two year lease extension will provide GSA with enough time to complete the lease procurement, associated design and construction activities, and relocate the NLRB to a new building in downtown Brooklyn, NY, effectuating a significant reduction in space footprint. Additionally, the existing lessor has historically been fully responsive to GSA and the tenant’s needs and do not have any outstanding lease administration deficiencies.

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.

N/A

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 lease extension of 23,238 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.

ORIGINAL SIGNED

__________________________________________ Date_____________________

Alfonso Yau, 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.

ORIGINAL SIGNED

________________________________________ Date______________________

Alfonso Yau, Leasing Specialist

Concurrence:

ORIGINAL SIGNED

________________________________________ Date______________________

Daren Marshall, Branch Chief, 2PRM

ORIGINAL SIGNED

________________________________________ Date______________________

Raffaela Battiloro, Lease Acquisition Officer, 2PR

ORIGINAL SIGNED

Crofton Whitfield, Director, 2PR

Approved for Legal Sufficiency:

Leigh Erin-Izzo, Senior Assistant Regional Counsel, LD2

Approved:

Warren Hall, Jr., Regional Competition Advocate, 2PG