The FAA has been relieved from the requirements of the Competition in Contracting Act (CICA), Federal Acquisition Regulations (FAR), Brooks Act, Prompt Payment Act, and other restrictive regulations and laws.

The real property space acquisition process is to be conducted following the best commercial business practices, in a fair and equitable manner, while complying with all applicable regulations.

3.Guidelines

The following procedures are designed to assist in identifying the best business practices and to promote reasonable competitive access to the FAA. s real property business, by the private sector. Competition has been recognized as beneficial in providing the Government with cost effective advantageous solutions. The FAA will acquire space competitively whenever practical and reasonable. However, competition may not always be practical. Single source is addressed where appropriate.

4.Request

The process for the acquisition of real property interests can be initiated informally such as a request for market information, potential costs, and availability. If costs are involved in the procurement, a certification of funding must be received prior to the obligation of any funds for any purpose (i.e., surveys, appraisals, space lease, etc.) or the award of a contract. At present, formal certification is normally provided by means of a Procurement Request (PR). A memo or other form of documentation can be used as a formal request as long as an approved certifying official, at the discretion of the Real Estate Contracting Officer certifies the document.

Whatever document is used as the official request, it must commit valid funding in an amount sufficient to cover the first fiscal year costs to be obligated in any contract(s) awarded.

Requirements received from the customer may be general in nature or can be very specific. The Real Estate Contracting Officer and the requesting service should discuss the request to ensure consideration of special requirements and the appropriate delineated area. The Real Estate Contracting Officer should assist the customer in the development of requirements to ensure that the space to be acquired will meet their needs and that it conforms to FAA regulations. The customer should be advised of available alternatives that may fulfill their needs at a lower cost or in a more efficient manner.

Repeated leasing actions in the same market area offer several options. These options may include a separate leasing action, a competitive consolidation at a new location or consolidation in an existing leased location. When the FAA is currently leasing space, in or near the delineated area, consideration should be given to the advantages, both economically and programmatic of collocation. If there is a demonstrated advantage to collocation, negotiations may be conducted with the lessor provided the proposed rental will be comparable with the market survey. s determination of the fair annual rental.

The FAA. s mission generally requires that offices be located near airports outside the central business area. The authority to lease space should primarily be used within 5 miles of an airport in order to preclude competing with other Federal agencies, which typically locate in downtown or suburban locations. Also, requirements such as prospectus submissions to Congress still apply for lease actions above an established threshold. Accordingly, any lease action totaling over 25,000 square feet or outside of 5 miles of an airport should be discussed with Headquarters, Real Estate Policy Branch.

On requests for renewal of existing leases, the Real Estate Contracting Officer should determine if the property continues to meet the FAA. s needs without any changes. This may require an on-site visit. Any changes required in the lease terms should be negotiated and included in the succeeding lease.

6.Advertising

The requirement need not be publicly advertised when the Real Estate Contracting Officer determines that it is not warranted, or reasonable competitive access can be achieved without advertising. Data from an advertisement or market survey may be used to determine the competitive range and/or to pre-qualify the suitability of real property. Data from a market survey may be used to determine the need for advertising.

If advertising is to be accomplished, the Real Estate Contracting Officer shall utilize the publicizing method most likely to result in receipt of offers appropriate to satisfying the specific requirement. Advertisements in most cases will be by local newspapers; however, this is not limited and may include commercial trade journals, electronic bulletin boards, and the Commerce Business Daily. Multiple advertising may be utilized if necessary.

The content of the advertisement is at the discretion of the Real Estate Contracting Officer.

7. Procurement   Method

Competition is the preferred method of procurement and should be utilized whenever practical and reasonable. Competition is obtained by providing two or more sources an opportunity to express an interest in satisfying the requirement. Competition is appropriate when the requirement is not site or location specific and the reasonable possibility exists that there is more than one provider that can meet the FAA. s needs. Interest may be expressed either orally or in writing.

The single source method of procurement is appropriate when technical requirements, business practices, or programmatic needs have determined that a specific location, site, or unique need is required to meet the FAA. s mission, or when it has been determined that only one source is reasonably available that can meet the requirement. The lease file should note the reason(s) competition was not used in the acquisition. Examples might be mission requirements, technically required location, etc.

8.Market Survey

The market survey is the key activity to determine: if space meets, or can be made to meet the FAA. s requirements; the quality of space offered; general market conditions; comparable prices; neighborhood environment; availability; and, what will best serve the needs and mission of the customer. An on-site visit is equally important in both a competitive and single source acquisitions.

The market survey can be used to determine the competitive range. A competitive range consists of offers that are likely to qualify for an award and grouped together by common attributes or specified criteria.

The Real Estate Contracting Officer and a customer representative should inspect those properties that can meet FAA. s requirements and clarify requirements with the building owners.

The Real Estate Contracting Officer should advise offerors how offers will be evaluated as to price (actual dollars vs. discounted), general requirements, special requirements, quality of the facility, etc. Evaluation criteria can be used to: a) make a final award, or b) determine those offers that are within the competitive range.

Following the inspection, the specialist and the customer representative should confer and determine if the building meets or can be made to meet the requirements by the specified occupancy date. If a building cannot meet or be made to meet the FAA requirements, the offeror should be informed, verbally or in writing, that the building will not be considered and provided a brief explanation. No further negotiations or consideration is required once an offer has been excluded.

In a single source acquisition a market survey is used to establish the fair market value. Additionally, the facility can be inspected to insure it meets all current safety and health requirements.

9.Firm-Term Lease Consideration

As provided in 49 U.S.C., Section 40110 (b)(2)(A) [copy attached] the FAA has authority to lease an interest in real property for not more than 20 years, without regard to FAA annual appropriations. This means the FAA has authority to enter into "firm-term" leases without violating the Antideficiency Act. FAA authority to lease real property does not allow lease terms in excess of 20 years, including all renewal options.

For purposes of this guidance a firm-term lease is defined as the period or length of time the lease or portion thereof cannot be canceled without the approval of the lessor.

Each region/center will determine when and how this authority will be used within the limitations set forth below. In using this firm-term authority, FAA Order 2220.1, Legal Participation in Procurement and Contracting, or its replacement order, must be followed.

Caution must be exercised in implementing firm-term lease authority. A firm-term lease commits the FAA to future rental payments. The FAA must be willing to commit future annual appropriations for the term of occupancy. If funding is not committed, the FAA would be in default of the lease and subject to claims by the lessor. Funding is the responsibility of the using organization and must be understood up front.

The cost or terms of the longer firm-term lease must be advantageous to the FAA as compared to a one year lease with renewal options. Prior to executing a firm-term lease the real estate acquisition team should advise and provide the organization responsible for funding with an analysis of potential lease costs and/or savings. Also prior to executing the lease the real estate acquisition team should obtain a written statement that acknowledges the terms and funding requirements of the firm term lease, including future budget year requirements. This written funding statement will be maintained in the real estate lease file.

A firm-term lease shall not be entered into if, in the judgment of the real estate contracting officer (CO), there is any doubt about the long term need of the user. The objective in leasing a facility is to obtain what is best not only for the user but also for the FAA. In some cases obtaining the lowest cost is not always the best, even though it is an important consideration.

Flexibility, especially in space leasing, needs to be part of the consideration for entering into a firm-term lease. As an example, if some cost savings would be realized with a 10 year firm-term space lease versus a 5 year firm-term lease, then some thought must be given to the potential for change (i.e., mission or operational need) at this facility in years 6-10. In this situation, it may be more advantageous to the FAA to lease for 5 years firm with an option to renew for an additional 3-5 years firm. It should be remembered that in the past, if space was requested for 5 years (based upon projected need) the FAA could lease for 10 years, without adverse ramifications, because the lease had an option to renew each year.

There is no requirement to use firm-term authority. Firm-term leases are a tool in obtaining what is best for the FAA. If firm-term authority is used, the manner in which contract documents are written must be consistent. In establishing consistency Regions/Centers should consider establishing, at least for some interim period, an appropriate level of firm-term lease review above the real estate CO.

9a.) Real Estate Firm-Term Considerations:

1) How long is the end user prepared to commit, in writing, to stay in this location? How comfortable does the real estate acquisition team feel about this time-frame?

2) Does any savings or benefit obtained in a longer firm-term justify the potential risk to the FAA?

3) Can two shorter firm-term periods serve almost the same purpose as one longer

firm-term period?

4) Does the firm-term period selected provide the FAA with the appropriate flexibility?

5) Is the FAA offering a firm-term lease because of a true market need or because one offeror has requested a longer firm-term?

6) Will the firm-term period allow amortization of the cost of alterations or construction in the rental payments instead of making a lump-sum payment? (The majority of commercial rental rates include a square footage allowance for amortizing the cost of initial space alterations over a specified period.)

9b.) Firm-term authority for space leases only:

Regions/Centers:

Regions/Centers with Headquarters Approval:

To insure that required prospectus packages and other legal requirements are appropriately considered, regional requests for firm-term leases that exceed 10 years require the review and concurrence of the Real Estate Policy Branch (ASU-140). However, all FAA leasing actions in Headquarters organizations in Washington D.C. must be coordinated through the Real Estate Policy Branch (ASU-140), in order to insure that all relevant planning and policy issues are taken into consideration prior to using this authority. All requests shall be sent through channels to the attention of the Real Estate Policy Branch (ASU-140). The requests should be no more than 2 pages (exclusive of any transmittal memo or other attachments) and include the following:

• Current location, square feet, annual lease costs, including any services or unusual features.
• Proposed location or area, square feet, estimated annual lease costs, including any services or unusual features and explanation of how competition will be obtained.
• Justification of the need to exceed 10 years firm and how will it benefit the FAA.
• Any additional relevant facts.
• Attach a memo signed by the customer indicating their intent to remain for the firm-term period requested.
• A signature and date line at the bottom of the transmittal memo for concurrence by the Real Estate Policy Branch, (ASU-140)

9c.) Other Lease Considerations:

To provide some protection to the FAA, the lease should include a clause allowing the FAA to sublease the premises in whole or in part. Additionally, the lease should allow the FAA rights to alter the premises to suit a new tenant.

9d.) Examples Of Clauses For Space Lease Documents:

15 year lease, 5 years firm, with termination after 5th year.

15 year lease, 5 years firm, with termination after 5th year OR renewal for 3 years firm with termination after 5th year.

10.Request For Offer

The offer(s) may be submitted to the Real Estate Contracting Officer informally or formally, at the Contracting Officer. s discretion. The offer(s) should reflect all negotiations and be used to prepare the final lease agreement.

Those offerors that are likely to be considered for an award should be asked to provide a set of scaled (1/8", 1/4" and/or CAD) floor plans which clearly identify the specific area being offered. In addition, major building features such as corridors, stairwells, restrooms, elevators, demising walls, columns, windows, and convectors should be clearly identified in sufficient detail for the specialist to properly evaluate the space.

11.Negotiation

If the competitive range method is used, once offers are determined to be within the competitive range, selection for final award may be made without further consideration of the selection criteria. Selection from the competitive range group may be made based upon that proposed offer that is best suited to the FAA. s needs, in the Real Estate Contracting Officer. s opinion. This includes benefits offered that have not previously been addressed in the FAA. s requirements provided. Any new benefits identified do not change the evaluation criteria used to develop the competitive range group.

When using the competitive range method in determining the offer most advantageous to the FAA the reason for selection should be some characteristic (or group of characteristics) that cannot be obtained from one or more of the other offerors. As an example, the selected offer may be located very near the main gate so as to provide ideal access to the FAA by its airport customers. This location should be within the original delineated area. The kind of item that may not be appropriate in selecting one offer over another is that one has a more sophisticated alarm system than the others. The alarm is something that might be readily installed at the other offered locations and still be competitive.

Should negotiations not result in an agreement that represents the best value to the FAA, negotiations may be discontinued and another selection made from the offers in the competitive range. The Real Estate Contracting Officer, at his/her discretion, may hold discussions/negotiations with any offeror.

When the final award is based on solicitation evaluation criteria, the evaluation criteria should be in writing and the lease file should indicate how the criteria will be used. Use of the evaluation criteria should be consistent through out the procurement.

Note: Unsuccessful offerors should be notified as soon as possible after an award has been made. However, the Real Estate Contracting Officer has full discretion in disclosing the status of negotiations provided that it does not conflict with any law or harm the FAA. s position.

The use of "best and final" offers is generally not used in real property acquisitions. Negotiations may be terminated at anytime by the Real Estate Contracting Officer.

Items for Negotiation:

The following items should be negotiated/discussed with the owners or owners. authorized representatives:

a. Measurement of space shall be by the occupiable square feet method and the square footage offered will be verified.

b. Correction of deficiencies found during the market survey.

c. Alterations or modifications, requested by the Government, to be made by offeror as part of the rent, to include painting walls, repair or replacement of carpet, electrical and telephone outlets, etc., and any lump-sum items. Based upon the scaled plans or diagram provided by the successful offeror, the specialist may develop a scaled drawing of the space to show partitioning, telephone/electrical outlets, and other finish details, plus any demolition that may be required. If funds are available, it may be advantageous to the FAA to pay for some alterations in a lump-sum manner.

d. Government hours of operation at the building, if different from those specified and overtime rates (i.e., HVAC, electricity, etc.), if needed.

e. Level and frequency of services and maintenance. Discuss building standard cleaning provisions, availability of property manager or maintenance personnel to respond to tenant complaints or complete necessary repairs, etc. If appropriate, consider incorporating owner. s standard lease language for cleaning, repairs, etc. If building standard is not sufficient, advise offeror of Government. s needs (e.g. cleaning on daily basis) and state in lease. If the negotiated offer will not include all required services, the Real Estate Contracting Officer must be certain that the services can be made available by the FAA through other means.

f. Rental including the services, utilities, alterations, and any other requirements identified in the lease/solicitation.

g. Base rates for utility and service operating costs, if applicable, and method of pass through or escalation of operating costs, if required.

h. Percentage of occupancy of the building, if the real estate tax is to be escalated or passed through.

i. Unit priced items such as electrical and telephone outlets, partitions, doors, etc., if they will be in the lease.

j.Building must meet current seismic safety requirements (E.O. 12699 & 12941 & P.L. 101-614)

The FAA is required to implement a program to mitigate seismic hazards in deficient buildings occupied by FAA. It is FAA. s policy to ensure the safety of its employees accordingly, every effort should be made in the acquisition of space to house FAA employees in seismically safe buildings. In this regard, any new leases or after the expiration of the last renewal term are to be made in buildings that do not comply with seismic standards which are not exempt. Existing leases may be held without action until the lease expires (including the expiration of the last renewal term).

While there are several levels of seismic performance, for leasing purposes "Substantial Life-Safety" will be the accepted performance objective. A higher seismic performance standard can be requested from offerors and modifications to increase the level of the standard seismic clause can be done by the Real Estate Contracting Officer (RECO). Unless stated otherwise all discussions below will refer to "Substantial Life-Safety" seismic performance. Except for buildings which require seismic performance objectives beyond Substantial Life Safety because of agency mission requirements (customer if in doubt, check with end-user), the following buildings are exempt from these standards:

• Building classified for agricultural use, or intended only for incidental human occupancy, or occupied by persons for a total of less than 2 hours a day,
• Detached one and two family dwellings that are located in areas having a governing acceleration coefficient less than 0.15 (within the United States, where A, is less than 0.15 as delineated on Map 4 of the 1991 "NEHRP Recommended Provisions for the Development of Seismic Regulation for New Buildings"),
• Special structures including, but not limited to: bridges, industrial towers and equipment, piers and wharves, and hydraulic structures,
• One-story buildings of steel light frame or wood construction with areas less than 3,000 square feet,
• Fully-rehabilitated buildings which comply with these Standards in all four compliance categories (structural, nonstructural, geologic/site hazards, and adjacency),
• Post- benchmark buildings as defined in Table 1, ICSSC RP4, which also comply with structural, nonstructural, geologic/site hazards, and adjacency compliance categories, unless a higher level of safety is required due to the facility mission,
• Pre-benchmark buildings which have been shown by evaluation to be life-safe in all four compliance categories, unless a higher level of safety is required due to the facility mission,
• Buildings constructed for the Federal government whose detailed design was done after the date of the adoption of Executive Order 12699 (January 5, 1990) and that were designed and constructed in accordance with the ICSSC "Guidelines and Procedures for Implementation of the Executive Order on Seismic Safety of New Building Construction",
• Leased buildings identified below as exempt, or
• Federally permitted or regulated privately owned buildings on Federal land.

Leased Facilities - In addition to the above exceptions, non-federally owned buildings and portions of such buildings leased by the Federal Government are exempt from these Seismic Standards if both of the following apply:

• The leased space is less then 10,000 square feet,

  And

• The Federal Government Leases less than 50% of the total building square footage.

A licensed structural engineer, hired by the offeror (or if appropriate the Government), is required to certify on the "Certification of Seismic Compliance" form that the construction meets the established acceptable standard. The licensed structural engineer will verify that the building is designed or built (as appropriate) to an acceptable building code or to a code that is substantially the same (seismically) as an acceptable model building code (see seismic safety clause for Model Building Seismic Design Provisions table). The structural engineer. s certification is to be kept with the contract file for the life of the contract and included in the close-out file. An acceptance document from the lessor for the building itself does not take the place of the required certification.

If no seismically conforming space is available, otherwise acceptable space with the best seismic resistance can be leased. An effort is to be made to move the office at the earliest point to a seismic safe building. If the RECO is unable to locate a building which is seismic safe then it should be noted in the file the action to be taken by the RECO (i.e., "No seismically safe buildings are available and unable to get interest in new construction for this office. Will periodically review building availability in the area to determine options for improving seismic safety for this office.").

Buildings that have been determined to be exempt by the RECO based upon the above exemptions, should complete the form "Certification Of Seismic Compliance" as follows: a) Fill in the date, b) Complete the first line that identifies the building, c) Complete the section at the bottom that starts with "FAA Use" (i.e., less than 10,000 sf and less than 50% of building, building not occupied, etc.) d) Sign in space provided for CO. This form when completed by the RECO is to be retained in the appropriate file.

The Realty Specialist may not have the expertise in determining which of two (2) (or more) buildings, that are not fully compliant with FAA. s standard, are the most seismically resistant. In making these determinations the FAA may need to contract for the assistance of a license structural engineer. At the time of this writing (11/97), the FAA currently has a contract with Sverdrup Corporation, Contract No. DTFA01-93-D-00006 that can provide the needed expertise. Funding will be required to use the contract. For further information contact Dennis Folliett in ASU-340 on (202) 267-3610. Additionally, GSA. s Region 9 in San Fransico is willing to provide seismic structural engineering assistance to FAA Realty Specialists by utilizing a Reimbursable Work Authorization (RWA). For further information regarding GSA assistance, please contact Catherine K. Lee on (415) 522-3188 or Bela Palfalvi on (415) 522-3183 of GSA Region 9.

New Construction for Seismic Safety - This clause applies to construction of new buildings to be leased for FAA occupancy, construction of new buildings built with Federal assistance, and construction of new buildings and additions to existing buildings where FAA is responsible for regulating the structural safety of said buildings. This clause does not apply to assistance provided for emergency work or for assistance essential to save lives and protect property and public health and safety performed pursuant to sections 402, 403, 502 and 503 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), 42 U.S.C. 5170a, 5170b, 5192 and 5193, or for temporary housing assistance programs and individual and family grants performed pursuant to Sections 408 and 411 of the Stafford Act, 42 U.S.C 5174 and 5178.

k. Discuss how energy and water conservation is or can be achieved (E.O. 12902 &

FAA-STD-033).

l. Offerors should be advised that a valid occupancy permit will be required at the time the space is inspected for acceptance. The permit will serve as evidence of conformance with local codes and ordinances. If the local jurisdiction does not issue occupancy permits or the permit is very old to the point of having no value, then the offerors shall complete and sign the Safety and Environmental Certification Checklist. The Real Estate Contracting Officer (RECO) may fill out the checklist and sign in place of the offeror. The above requirement is to insure that FAA personnel are housed in safe space and should a problem arise, the condition of the building/facility has been documented.

m. Testing for asbestos, polychlorinated biphenyl. s (PCB. s), hazardous waste operations, radon, and clean air and water are not required. However, should the Real Estate Contracting Officer be concerned about safety or environmental aspects of the offered space, a test may be requested from the offeror at no cost to the FAA, prior to further consideration. Failure to provide requested test information in a timely fashion can be grounds for excluding the offered space from further consideration.

n. Handicap accessibility requirements (41 CFR 101-19.6, App. A). The FAA is required to comply with the Uniform Federal Accessibility Standards (April 1, 1988, or latest version) in leased space and all applicable federal, state and local accessibility laws and regulations.

o. Recycling should take place where State and/or local law or code requires recycling programs. Lessor should be encouraged to establish a recycling program if it is economically feasible, if not mandated by code or law (E.O. 12873).

p. The Government is to make all payments through the use of Electronic Funds Transfer Payment (EFT ) (P.L. 104-134). See Section D., Real Estate Asset Management, for guidance.

q. Under Airport Improvement Program (AIP) grant agreements, airports are required to provide space or land at no cost for the FAA to construct at its cost facilities for air traffic, navigation, weather reporting and communication activities. As leases begin to expire or new requirements for a covered activity are identified, Regional Logistics Divisions should advise airport sponsors that the FAA intends to assert its rights for cost free space and land in accordance with the attached guidance document, "Criteria for Rent-Free Space". See Appendix A, Rent-Free Guidance.(Added 06/1999)

In a single source acquisition all items may be discussed, as above.

12.Evaluation Of Offers

a. When selection factors are used to make the final award or to determine the competitive range group, they must always be evaluated against written evaluation criteria.

b. The Real Estate Contracting Officer should review the offer(s) and make a selection that will represent the optimum solution to the FAA. While price need not be the primary factor, it must be considered and addressed in the lease file.

c. Price evaluation can be in actual (undiscounted) dollars. For evaluation of total cost, the annual per square foot price should include the estimated cost of any required services, utilities, or lump sum items not included in the rental. Estimated or negotiated escalation costs should be included, if applicable. In complex offers or with offers with longer lease, terms it may be more advantageous to evaluate in discounted (present value) dollars. Whatever method used, it must be consistent with all offerors throughout the lease acquisition process. Leases without any escalation should be considered, when possible.

d. The Real Estate Contracting Officer must review the List of Parties Excluded from Federal Procurement or Nonprocurement Programs (Debarred Bidders List) to determine that the proposed successful offeror is not listed.

e. The customer should be advised as soon as possible of the recommendation for award.

In a non-competitive space acquisition the Debarred Bidders List should be reviewed. The offer analyzed to ensure it conforms with negotiations.

13.Fair Market Value Determination

Appraisals are not required. However, if an appraisal is not obtained the Real Estate Contracting Officer should use market data to evaluate the price and document the lease file to demonstrate that the proposed contract rental represents a fair price to the FAA. This applies to competitive and non-competitive space acquisitions.

Market data used to determine fair and reasonable rental, generally, should consist of comparing at least three (3) similar leased locations in the same general area with appropriate adjustments for differences. A formal appraisal should be considered when the requirements or building are unique and/or obtaining market data is difficult or requires special skills.

14.Award

a. The Real Estate Contracting Officer should make any necessary changes or additions to the proposed lease based upon the negotiations and/or offer.

b. The lessor must provide required information to participate in the EFT payment process in which rental payments will be electronically transferred to the bank account of the lessor or payee.

c. An appropriate number of the original lease should be sent to the successful offeror. (The Real Estate Contracting Officer should ensure that the number of lease documents with original signatures is sufficient to meet the FAA. s needs.) The offeror must sign all originals, (initialing each page of the lease is optional) and return them for signature by the Real Estate Contracting Officer. Prior to the Real Estate Contracting Officer signing the returned lease document it should be compared to the copy retained in the file to ensure that no changes have been made by the offeror. The Real Estate Contracting Officer will sign all originals, which now becomes the lease. After the Real Estate Contracting Officer signs the lease, at least one executed lease must be sent to the lessor.

d. The Real Estate Contracting Officer should ensure that all information is entered into the real property database.

e. Legal review of lease contracts is recommended where deviation from standard clauses is made. Legal review is required on purchases. The Department of Justice rules on condemnation and title requirements must be followed.

This section applies to competitive and non-competitive space acquisitions.

15.Inspection And Acceptance

a. The Real Estate Contracting Officer should arrange to inspect the space sufficiently in advance of the required occupancy date to ensure that it is ready for the customer. The lessor must provide evidence of a valid occupancy permit at this time unless the local jurisdiction does not issue occupancy permits. The inspection may be delegated to a knowledgeable FAA employee.

b. Acceptance may be provided in writing or verbally with any discrepancies or unfinished items noted in the lease file. In most cases discrepancies will be agreed to in writing by the FAA and the lessor.

c. If the space is not ready for occupancy on the previously established date or occupancy takes place sooner than previously planned, the lease should be amended to reflect the actual commencement the date and rental amount.

d. Deficiencies, often referred to as "punch list items," i.e., touch-up paint, missing outlet covers, etc., needed not prevent acceptance of space and commencement of rent; however, firm dates for correction must be set. A follow-up inspection should be scheduled to be sure that the work is completed. The results of the follow-up inspection should be documented in the file. Note: When large deficiencies remain it is often advantageous to delay acceptance until they are completed. Delay of acceptance has been found to provide an incentive to the building owner to quickly complete punch list items.

e. If ratios of tenant finish items are used, a count of these items should be made. Rent should be adjusted up or down to reflect the actual count of unit price items in accordance with the lease.

f. The Prompt Payment Act does not apply to the FAA however, the FAA should make payments within 30 days after acceptance of space, alterations, or improvements or as provided in the contract. As determined by the Real Estate Contracting Officer, the FAA may apply late payment interest to payments made within the scope of real property contracting actions.

This section applies to competitive and non-competitive space acquisitions.

16.Documentation

Sufficient documentation shall be developed to explain and justify the acquisition action taken. These documents shall be retained in the applicable lease acquisition file.

Required:

1) Fair Market Value determination or appraisal

2) Negotiation records

3) Summary of actions with record of determination for selected offer.

4) Contract with all amendments

5) Facility drawings (as appropriate)

6) Signed or authorized request and certification of funding

7) Copies of other offers (as appropriate)

8) EFT information

Optional:

10) Market survey sheet for each location visited

11) Photo of each location visited

12) Offerors cost information

13)Facility drawings in CAD-CAM format

This section applies to competitive and non-competitive space acquisitions.

17.Alterations And Improvements

Alterations or improvements done by the lessor may be amortized over the term of the lease, made by lump-sum payment, or other method determined appropriate by the Real Estate Contracting Officer. Unusual payment methods should be reviewed for legal sufficiency.

Alterations:

a. First consideration should be given to lessor provided alterations. It is normally in the FAA. s best interest to have the lessor perform alterations in his/her own building, thereby eliminating any question of liability on the part of the FAA.

b. Required alterations performed under an existing FAA lease by the lessor should be at a fair and reasonable cost. Determination of fair and reasonable may be made by formal appraisal, market data, cost to build publications (Marshall and Swift, BOMA, etc.,), detailed review of the lessors estimates, estimate by the government, etc.

c. Alterations under an existing lease generally are considered single source and do not require competition. Payment for lessor provided alterations may be through an adjustment in the annual lease payment or lump-sum.

d. As appropriate, obtain a waiver of restoration from the lessor.

Improvements:

The FAA can make permanent improvements to private facilities under the provisions of the lease agreement. The ability to make permanent improvements using a third party is restricted as provided in decision by the Comptroller General (B-239520, 8/16/90).

a. As in the case of alterations it is advantageous to have the lessor provide the improvements. However, this may not be the case in all improvements. Generally, the lessor should be considered first if the improvement connects to an existing lessor owned structure or could have some impact on existing lessor owned facilities. In any decision concerning FAA provided improvements consideration must be given to disposal and/or restoration costs, estimated life, maintenance, increase in the value of the leased premises, etc.

b. Improvements often are of no value when removed from a building (i.e., electrical components, etc.). Accordingly, improvements should be evaluated using best business practices.

c. Improvements performed under an existing FAA lease by the lessor should be at a fair and reasonable cost. Determination of fair and reasonable may be made by formal appraisal, market data, cost to build publications (Marshall and Swift, BOMA, etc.,), detailed review of the lessors estimates, estimate by the government, etc.

d. Improvements under an existing lease generally are considered single source and do not require competition. Payment for lessor provided improvements may be through an adjustment in the annual lease payment or lump-sum.

18.Renewals

Space lease renewals may be done non-competitively. The FAA will, through market research, insure that renewals at an existing location are at fair annual rent. However, relocation to acquire a better value is always an option, at the discretion of the Contracting Officer. While cost to relocate should be considered it need not be the primary consideration for renewal.

Care should be taken when renewing a lease to ensure that all new requirements and new regulations (e.g., seismic safety, energy conservation, fire safety, etc.) are incorporated in the new lease agreement.

19.Documents

The following documents/formats are provided to assist in space leasing actions.

a. FAA Expedited Lease - The expedited lease consists of the two (2) page (front and back) document titled "Federal Aviation Administration Lease For Real Property". Also, to be attached to this document is the clause "Electronic Funds Transfer (EFT) Payment" and "Vendor/Miscellaneous Payment Form". The expedited lease document does not provide all of the protections associated with housing personnel for long periods of time or clauses designed to contractually protect the FAA. This should be used for small blocks of space, typically approximately 1,000 square feet or less, or short term (i.e., approximately 1 year). Additional clauses may be added as determined by the Contracting Officer.

b. FAA Standard Space Lease - This document is generally suitable for existing buildings with non-complex requirements. On large, complex, or new construction the General Services Administration lease package should be considered for use. The standard space lease may consist of the following documents:

- Federal Aviation Administration Lease For Real Property - Mandatory

- SFO Cover - Optional

- SFO Instructions - Optional

- Lessor. s Annual Cost Statement with instructions - Optional

- Proposal To Lease Space - Optional

c. Space Lease Clause Matrix - This document lists dated space lease clauses with appropriate use. Those clauses designated as "mandatory" may be modified or deleted only with approval from legal counsel.

d. Safety and Environmental Checklist - This form should be used when the local municipality does not provide occupancy permits. In those situations that the FAA is unable to obtain a completed form from the lessor/offeror the Contracting Officer may complete the form for the lease file however, in this situation the FAA has assumed the responsibility for accuracy. Real Estate Contracting Officers may use this form in any space leasing action.

e. Action Summary - This document provides a format in which to document the rational for an award. - Optional

f. Market Survey - This document provides a format in which to document information obtained at each location visited during a market survey. - Optional

20.Short-Term Conference And Meeting Space

Conference or meeting space requirements may range from the rental of a room for a one-day meeting or training session to a large conference of several days. As in all procurements of commercial space the requiring organization must first seek the availability of Government-owned or controlled space. The FAA is required to make inquiries regarding the availability of Government-controlled space to GSA regional offices and to document such inquiries. The requirements for obtaining GSA authorization are outlined in Federal Property Management Regulation 101-17.101-4.

The selection of commercial meeting space may be based on a location which provides the most advantageous solution to the FAA. s needs. Procedurally, the requesting organizations should first check on the availability of FAA space. Check with the Regional Logistics Division to determine local procedures and restrictions. If FAA space is not available, then initiate your request in accordance with local procedures. A vendor/hotel may be contacted to acquire an estimated cost; however, no commitment should be made at that time. Upon receipt of authorization to procure commercial space, you should proceed in accordance with federal and local procedures as provided by the appropriate Regional Logistics Division.

If the cost of the conference space is within the limits of cardholders purchasing authority, see AMS Section 3.2.2.5. If the cost of the space exceeds the limits of a cardholder you should check with the appropriate Logistics Division to determine local procedures. The space should not be utilized until an authorized person with procurement authority has approved the transaction and finalized the agreement.

Subject:            ACTION: Rent Free Space

From:          Acting Director of Airport Planning and Programming, APP-1

Director of Acquisitions, ASU-1

Director of Resources Management Program, AFZ-1

To:              All Regional Airports Division Managers, AXX-600

All Regional Logistics Managers, AXX-50

All Regional Airway Facilities Managers, AXX-400

Date:                Memo signed August 16,1999

On May 18, a memorandum and guidance document, “Criteria for Rent-Free Space,” was sent to all regional offices.  The guidance outlined the Federal Aviation Administration (FAA) policy for asserting rights with obligated airports to rent-free land and space for air traffic control, navigation, weather reporting, and communications facilities for air traffic control.  The guidance was to apply to all leases expiring after September 30, 1999, for the activities identified above.

Since that time, there have been a number of questions regarding the respective rights of the various parties.  In addition, many airports have indicated that the original effective date for the guidance would create a significant financial hardship due to the short lead-time provided.

We have decided to defer implementation of the guidelines, “Criteria for Rent-Free Space,” for 1 year (until September 30, 2000), so that full notification to affected airports could be made and that proper fiscal planning could be undertaken by airports.

Regional representatives should discuss the rent-free space issue with airports as soon as practicable so that all airports are given the full benefit of this deferral. Leases covered by the May 18 memorandum that expire prior to September 30, 1999, should be extended only through September 30, 2000, if they are to contain a rent provision.  They may be extended for a longer period if the parties have agreed to a rent-free lease or if it has been determined that another form of payment by the FAA is acceptable (i.e., the amortization of improvements undertaken by an airport for the FAA).  Furthermore, the regional representatives should continue to prepare the airports for the financial impact for those leases expiring prior to October 1, 2000, the new implementation date of the guidance.

Additional clarifications based upon input from field facilities and from the airport industry will be issued in the near future.  Additionally, a standard letter of notification will be provided to Airports offices for distribution to airports.  If your region has already notified airport sponsors or if sponsors have contacted your offices, we request that you inform them of this deferral action.

  Catherine M. Lang                 Gilbert B. Devey, Jr.                   Steven I. Rothschild

 Attachment – “Criteria for Rent-Free Space Guidance”

Definition:

"The FAA will receive without cost the right to occupy space in an existing building or portion of a building owned or controlled by the sponsor."

Covered activity is the following list of facilities that qualify for rent-free space as defined by the grant language.

The FAA reserves the right to occupy space rent-free for the above referenced facilities (see C. Covered Activity). This includes any space (i.e. storage, parking for official FAA vehicles essential to the Covered Activity, etc.) requirements that directly support the operation of above referenced facilities.

Any improvements or alterations added to the space for the specific use by the FAA will be at the expense of the FAA. The cost of such improvements if provided by the sponsor, may be paid lump sum or amortized over the term of the lease. These costs are a subject of negotiations between the FAA and the sponsor taking into consideration availability of funds to the FAA for facility improvements.

The FAA reserves the right to inspect the space sufficiently in advance of the required occupancy date, and to determine the space is acceptable prior to lease execution.

The FAA may accept the space "As-Is". In this document, the FAA defines "As-Is" as the existing condition of the space, including any items in the space, at time of acceptance.

Other requirements to be provided by the sponsor without cost to the FAA:

• Any support buildings, if available, that will directly support a covered activity
• Maintenance
  Exterior Maintenance
• Exterior of the building(s) and its subsystems.

  Interior Maintenance

• Maintain mechanical systems that supply or control space, in good repair and condition so that they operate in accordance with manufacturer. s specifications. Examples of such systems are HVAC, safety systems, lighting systems, and access systems.

Utilities/custodial services . The requirement of rights in existing buildings does not require the sponsor to provide utilities or services at no cost. The cost of utilities and services provided by the sponsor will be subject to negotiation. The sponsor should install a separate meter when utilities are to be paid for by FAA. Proration of utilities is generally not acceptable.

A lease for space that accommodates a covered activity will become rent-free under these guidelines and when current lease expires and is renewed, unless another legally binding agreement governs.