FILE | X | SLA 13: Lease Extension - Justification and Approval (J&A)

FBO DAILY ISSUE OF DECEMBER 01, 2011 FBO #3659
DOCUMENT

X -- SLA 13: Lease Extension - Justification and Approval (J&A)

Notice Date: 11/29/2011
Notice Type: Justification and Approval (J&A)
NAICS: 531120 — Lessors of Nonresidential Buildings (except Miniwarehouses)
Contracting Office: Department of Veterans Affairs;VISN 18 NCO;4135 South Power Road;Mesa, AZ 85212
ZIP Code: 85212
Solicitation Number: V10108401997
Archive Date: 1/31/2012
Point of Contact: Antionette Collins-Somerville
E-Mail Address: outh
Small Business Set-Aside: N/A
Award Number: V101-084-019-97
Award Date: 1/1/2012
Description: DEPARTMENT OF VETERANS AFFAIRS Justification and Approval For Other than Full and Open Competition 1.Contracting Activity: The VA Southwest Health Care Network “ VISN 18 Consolidated Contracting Activity, Phoenix VA Health Care System, 6950 E. Williams Field Rd, Mesa, AZ 85212. 2.Nature/Description of Action Being Processed: This activity proposes to solicit with Arizona State University, using other than full and open competition procedures to provide the Phoenix Health Care System (PVAHCS), Southeast Community Based Outpatient Clinic (SE CBOC) with a lease extension until the new SE CBOC is completed by Real Property Service(anticipated award November 2011). The lease extension will be a modification to the existing lease which is set to expire on December 31, 2011. 3.Description of Supplies/Services Required to Meet the Agency ™s Needs: The Phoenix VA Health Care System currently occupies 43,982 net square feet of medical space for the SE CBOC. On April 16, 2010, the Phoenix VA Health Care System Director requested delegation authority from Real Property Service to extend Lease V101-084-019-97(SE CBOC).The Phoenix VA Health Care System Director requested the lease extension be procured through VISN 18 CCA delegated authority. VISN 18 Consolidated Contracting Activity (CCA) received approval from Real Property Service providing delegation approval to implement the lease extension. The current requirement is for a one year term from January 1, 2012 through December 31, 2012 with a one year renewal period from January 1, 2013 through December 31, 2013 or until September 30, 2013. The Department of Veterans Affairs has a continued need for the leased medical space until the new SE CBOC construction is completed. Cost Per Square Foot:$12.26 per sq foot Estimated Annual Rental Cost: $539,219.32 4.Statutory Authority Permitting Other than Full and Open Competition: In accordance with GSAM 570.405 śLease Extensions ť the following statutory authority is cited as justification for a lease extension to Arizona State University. The statutory authority permitting Lease Extensions is GSAM 570.405 ś (a) This subsection applies to extension of the term of a lease to provide for continued occupancy on a short term basis. (b) If the value of a lease extension will exceed the simplified lease acquisition threshold, the justification and approval requirements in FAR 6.3 and 506.3 apply. (X) (1) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements per FAR 6.302-1(c); authorizes contracting without providing for full and open competition when the property or services needed by the agency are available from only one responsible source and no other type of property or services will satisfy the needs of the agency. This authority may apply to lease extensions in situations such as the following: (2) The Government encounters unexpected delays outside of its control in acquiring replacement space. 5.Demonstration that the Contractor ™s Unique Qualifications or Nature of the Acquisition Required the Use of the Authority Cited Above(applicability of authority): The SE CBOC is located at 6950 East Williams Field Road, Mesa Arizona 85012 on the Arizona State University campus. The current lease was initiated January 1, 1997 and expires on December 31, 2011. On October 28, 2008, the Secretary of the Veterans Affairs approved the relocation and replacement of the SE CBOC located in Mesa, Arizona. The PVAHCS was approved for 60,000 square feet of space to replace the existing lease. The approval will also compensate for the spatial needs due to the increase in patient workload. The PVAHCS submitted a request to Real Property Service on November 5, 2008 to conduct the replacement of the lease for the SE CBOC. Notification was received on January 27, 2009, from Real Property that they were ready to begin the acquisition process for the new Mesa CBOC. Once the acquisition was initiated by Real Property Service, the PVAHCS had to resubmit a new authorization package to include the parking analysis and space plan. The Federal Business Opportunities notification was posted from April 13, 2009 through March 29, 2010 for anticipation of the new procurement. The market survey was conducted on June 22 & 23, 2010. It was determined on the market survey that PVAHCS leadership wanted to decrease the area of consideration. PVAHCS requested that the delineated area be decreased since the area was encroaching into the service area for the PVAHCS hospital. Therefore, the requirement had to be re-advertised and a new market survey conducted on October 28, 2010. Considering a new delineated area did cause additional steps in the procurement process that extended the original timeline. Therefore, due to the re-advertising for the new delineated area and the approval for the lease acquisition process. It has caused an unanticipated increase to the timeline in order to complete the project by December 31, 2011. A solicitation for new space is expected to be issued by Real Property Service on May 25, 2011, with an anticipated award, no later than November 1, 2011. It is anticipated that occupancy will occur no later than September 30, 2013. The proposed lease extension will provide sufficient time for award of the new lease as well as completion of the build out. Because of the amount of time needed to complete this requirement, the Contracting Officer is requesting approval to extend the existing lease pursuant to the authority of GSAR 570.405 (c)(2). The total negotiated price for the extension is $12.26 per ANSI/BOMA square foot, for a total monthly cost of $44,934.94. The total cost of the two year extension will be $1,078,438.60. The current negotiated lease rate for the base and current extension period is $12.26 per ANSI/BOMA square foot for a fully serviced lease, totaling $539,219.32 for each extension period. This rate has already been determined to be fair and reasonable to the Government. It is anticipated that the lessor will agree to the extension without a change in the rental rate. If an increase in the rental rates is requested, further negotiations will take place to ensure that the negotiated price is fair and reasonable. This will bring the total value of the lease, including all options and extensions to $9,166,728.40. The lease would be in existence for a total of seventeen years, including all options and extensions. There are two significant factors that controlled the establishment of the pre-negotiation objectives and the negotiated agreement. First, the Government requires the lease extension in order to provide sufficient time to complete a replacement lease as well as complete any build out requirement to meet the Government ™s requirements. Secondly, in order to justify any request for increase in the rental rate the Government must be able to show that proposed rate is fair and reasonable. If a rental rate increase is requested, an appraisal of the property will be completed by a MAI certified appraiser at the Government ™s request. It would not be feasible to conduct a temporary lease to supplement the lease extension due to the size of the requirement and the time required to relocate to temporary space. A temporary relocation of similar size would be a waste of funds since it has been identified additional space is needed. The move costs would be the same to move to temporary space as it would be to move to the new larger space once the procurement is completed. Furthermore, the PVAHCS did their due diligence to initiate the request for replacement of the lease to provide sufficient lead time. It would be in the Governments best interest to remain at the current location until Real Property Service has awarded the new procurement. The above acquisition will be negotiated with:Arizona State University 6027 S. Sagewood Mesa, Arizona 85212 6.Description of the Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: There are sources capable of providing approximately 44,000 square feet of medical office space in the Mesa, Arizona region which was determined through searches on LoopNet (www.loopnet.com). It would not be feasible to move to these locations on a temporary basis since it has been identified by the PVAHCS that they require 60,000 square feet. Real Property Service posted a sources sought notice on the Federal Business Opportunities website on January 27, 2010 (VA-101-10-RP-0051). The sources sought notice was requesting interested offerors to submit properties satisfying approximately 60,000 square feet of medical space. An additional notification was posted in the Arizona Republic Newspaper for properties to be submitted for market survey by no later than March 1, 2010. 7.Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable: The Contracting Officer has determined that the anticipated cost to the Government will be fair and reasonable based on current market rental rates. A search for commercial properties of similar size and use was conducted on LoopNet (www.loopnet.com). LoopNet identified seven possible properties that are available in the Mesa area for possible relocation. The properties are ranging from $12.00 per square foot - $24.95 per square foot. The prices offered were un-serviced rental rates. The Lessor is offering the existing rental rate during the extension period of $12.26 per square foot. It is anticipated that the Lessor will agree to the extension without a cost increase to the rental rate. 8.Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research was Not Conducted: A market survey was conducted on June 22, 2010 and October 28, 2010 for the relocation of the SE CBOC. The properties offered during the market survey were received in part from the sources sought notices posted on Federal Business Opportunities website. A total of 26 properties were located on June 22 & 23, 2010 for market survey. Of the 26 sites a total of three sites were rejected by the market survey team. On October 28, 2010 a total of 26 properties were identified for market survey. Of the 26 sites a total of thirteen sites were new submissions and the rest being the same properties from the market survey conducted previously. After the market surveys were conducted the market survey team accepted a total of six sites that would still be considered. 9.Any Other Facts Supporting the Use of Other than Full and Open Competition: Due to the importance of outpatient services provided to veterans in the Mesa, Arizona region. It is necessary and urgent that other than full and open competition procurement procedures is appropriate to obtain the lease extension until the new lease is awarded. The new lease award will be conducted using full and open competition procedures. 10.Listing of Sources that Expressed, in Writing, an interest in the Acquisition: Arizona State University 6027 S. Sagewood Mesa, Arizona 85212 11. A Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to Competition before Making subsequent acquisitions for the supplies and services required: In the future it may be advantageous to initiate a request to Real Property Service for replacement of an existing lease of this size within six to seven years prior to the ending of the lease. This would allow for additional time if unexpected barriers occur that would cause the procurement to be delayed. Currently, Real Property Service is anticipated to issue a Solicitation for Offer on May 25, 2011 for a new requirement for a minimum of 60,000 sq feet of medical space. The new requirement will address the replacement of Lease V101-084-019-97 and additional space that is required. 12. Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief. __John Li for__________________ 6/6/11 ____________________ Dr. Christopher Bacorn Date Associate Medical Center Director Phoenix VA Health Care System 13. Approvals in accordance with FAR 6.304 a.Contracting Officer's Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief. ___Sabrina Smith______________ _7/22/2011______________ Sabrina Smith Date Network Contract Manager VISN 18 b. VISN/PCA QA: I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief. Paulette Pereira__________________ _____7/21/2-11_______________ Paulette Pereira Date NCA QA Compliance VISN 18 c. NCM/PCM: I certify the justification meets requirements for other than full and open competition. ___Sabrina Smith______________ ____7/22/2011______________ Sabrina Smith Date Network Contract Manager VISN 18 d. SAO: I certify the justification meets requirements for other than full and open competition. __Delia Adams_________________ _____8-2-11__________________ Delia Adams Date Director Service Area Office “ West e. VHA HCA ™s 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 (over $50 million), approve (up to $50 million) for other than full and open competition. Norbert S. Doyle_________________ ___8-11-2011__________ Mr. Norbert Doyle Date Acting Chief, Procurement Officer VHA, Head of Contracting Activity
Web Link: FBO.gov Permalink
(https://www.fbo.gov/spg/VA/PhVAMC/HMC/V10108401997/listing.html)
Document(s): Justification and Approval (J&A); File Name: V101-084-019-97 SLA 13 V101-084-019-97 SLA 13.doc (https://www.vendorportal.ecms.va.gov/FBODocumentServer/DocumentServer.aspx?DocumentId=277314&FileName=V101-084-019-97-SLA+13001.doc); Link: https://www.vendorportal.ecms.va.gov/FBODocumentServer/DocumentServer.aspx?DocumentId=277314&FileName=V101-084-019-97-SLA+13001.doc; Note: If links are broken, refer to Point of Contact above or contact the FBO Help Desk at 877-472-3779.
Record: SN02630403-W 20111201/111129234737-67fb2468c022021d1c80d924e0b0d98d (fbodaily.com)
Source: FedBizOpps Link to This Notice
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X -- SLA 13: Lease Extension - Justification and Approval (J&A)