explained in the contract file. Succeeding leases which exceed the simplified lease acquisition threshold may be entered into when a cost-benefit analysis has been conducted and the results indicate that an award to an offeror other than the present lessor would result in substantial relocation costs and duplication of costs to the Government that are not expected to be recovered through competition.

(b) Procedure—(1) Publicizing/Advertising. The contracting officer shall publish a notice in local newspapers and/or periodicals if required by 505.101(c). The notice should normally (i) indicate the Government's lease is expiring, (ii) describe the requirement in terms of type and quantity of space, (iii) indicate the Government is interested in considering alternative space if economically advantageous, (iv) advise prospective offerors that the Government will consider the cost of moving, alterations, etc., when deciding whether it should relocate, and (v) provide a contact person for those interested in providing space to the Government.

(2) Market survey. A market survey must be conducted in accordance with 570.301.

(3) Competition determination. (i) If no potential acceptable locations are identified through the advertisement or the market survey, the contracting officer may prepare a justification to negotiate directly with the present lessor. The justification must be prepared and approved in accordance with FAR subpart 6.3 and subpart 506.3, and should fully document the efforts to locate alternative sources.

(ii) If potential acceptable locations are identified through the advertisement or market survey and relocation costs (including estimated moving costs, telecommunications costs, and the estimated cost of alterations, amortized over the firm term of the lease) will be low enough to allow recovery through a competitive process, the contracting officer should develop a SFO and negotiate with all interested parties in accordance with the procedures in subpart 570.3.

(iii) If potential acceptable locations are identified through the advertisement or market survey and substantial relocation costs are involved, the con

tracting officer shall conduct a costbenefit analysis to determine whether the duplication of costs to the Government could be recovered through competition. The cost-benefit analysis must give consideration to the prices of other potentially available properties, relocation costs, and other appropriate considerations. The prices for other potentially available properties must be established by requesting the prospective offeror to provide an informational quotation for standard space for comparison purposes. The prices quoted for standard space will be adjusted by the Government for special requirements. A formal solicitation for offers (SFO) is not required for the purpose of obtaining the informational quotation. The contracting officer

shall provide a general description of the Government's needs when requesting informational quotations. If oral quotations are provided, the record must be documented to reflect the following information, as a minimum: the name and address of the firm solicited, the name of the firm's representative providing the quote, the price(s) quote, the description of the space and services for which the quote is provided, the name of the Government employee soliciting the quotation, and the date of the conversation. The informational quotations must be compared to the present lessor's price, adjusted to reflect the anticipated price for a succeeding lease. Based on the results of the cost-benefit analysis, the contracting officer will:

(A) Prepare a justification for approval in accordance with FAR Subpart 6.3 and Subpart 506.3 to support the determination to negotiate with the present lessor for continued occupancy because it is likely 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; or

(B) Develop an SFO and negotiate with all interested parties in accordance with the procedures in subpart 570.3.

[54 FR 26585, June 23, 1989, as amended at 57 FR 37897, Aug. 21, 1992; 60 FR 42799, Aug. 17, 1995]

570.503 Expansion requests.

(a) When the expansion space is within the general scope of the lease, the space may be acquired through a modification to the lease without further justification pursuant to FAR subpart

6.3.

(b) When the expansion space needed is outside the general scope of the lease, the contracting officer must determine whether it is more prudent to provide the expansion space by supplemental agreement to the existing lease or to satisfy the requirement by competitive means. A market survey must be conducted to determine whether suitable alternative locations are available. If the market survey reveals alternate locations that can satisfy the total requirement, a cost-benefit analysis must be performed to determine whether it is in the Government's best interest to relocate. This analysis may include

(1) The cost of the alternate space compared to the cost of expanding at the existing location;

(2) The cost of moving;

(3) The cost of duplicating existing improvements;

(4) The cost of the unexpired portion of the firm lease term (unless a termination is possible, in which case the actual cost of such an action should be used); and

(5) The cost of disruption to the agency's operation.

(c) When the expansion space is outside the general scope of the lease, a justification must be prepared for approval in accordance with FAR subpart 6.3 and 506.3, except when competitive procedures or simplified lease acquisition procedures are used.

[54 FR 26585, June 23, 1989, as amended at 57 FR 37897, Aug. 21, 1992; 60 FR 42799, Aug. 17, 1995]

570.504 Superseding leases.

(a) Consideration should be given to the execution of a superseding lease that would replace the existing lease when the changes or modifications to the space contemplated are so numerous or detailed as to cause complications, or they would substantially change the present lease.

(b) The justification and approval requirements in FAR subpart 6.3 and 506.3 must be complied with before negotiating a superseding lease if the value of the lease exceeds the simplified lease acquisition threshold. When the cost is less than or equal to the simplified lease acquisition threshold, the contracting officer may use simplified procedures outlined in 570.2 and explain the absence of competition in the file.

[60 FR 42800, Aug. 17, 1995]

570.505 Lease extensions.

(a) The justification and approval requirements in FAR subpart 6.3 and 506.3 must be complied with before negotiating a Supplemental Lease Agreement exceeding the simplified lease acquisition threshold to extend the term of the lease to provide for continued occupancy on a short term basis (usually not to exceed 1 year). For extensions valued less than or equal to the simplified lease acquisition threshold, the contracting officer must explain the absence of competition in the contract file.

(b) FAR 6.302-1 provides for 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 be used to extend the term of a lease by supplemental agreement in situations such as the following:

(1) When the agency occupying the leased space is scheduled to move into other Federally controlled space but unexpected delays are encountered in preparing the new space for occupancy.

(2) When unexpected delays which are outside of GSA's control (i.e., protests, etc.) are encountered in acquiring replacement space.

(3) When various agencies occupying leased space are being consolidated and it is necessary to extend the terms of some leases to establish a common expiration date.

[54 FR 26585, June 23, 1989, as amended at 60 FR 42800, Aug. 17, 1995]

Subpart 570.6-Special Aspects of Contracting for Lease Alterations

570.601 General.

(a) Although the Government generally has a contractual right to alter the space leased, normally most alterations are acquired through a modification to the lease because they fall within the general scope of the lease and it is in the Government's interest to acquire the alterations from the les

sor.

(b) As the need for alterations arise during the term of a lease contract, the contracting officer must examine each project and make a determination as to whether the alterations fall within the general scope of the lease and may be acquired through a modification to the lease. The primary test is whether the work can be regarded as fairly and reasonably an inseparable part of the lease requirement originally contracted for. If the alterations are outside the general scope, the contracting officer must make a decision to acquire the alterations through a separate contract, through a Supplemental Lease Agreement, or to request the work be performed by Federal employees.

570.602 Alterations by the lessor.

570.602-1 Justification and approval

requirements.

(a) The justification and approval requirements in FAR Subpart 6.3 and 506.3 must be complied with before negotiating directly with the lessor for any alteration project exceeding $100,000 that is outside the general scope of the lease contract.

(b) Before negotiating directly with the lessor for any alteration project of $100,000 or less, that is outside the general scope of the lease, the contracting officer shall document, in writing, the reasons for the absence of competition. [54 FR 26585, June 23, 1989, as amended at 60 FR 42800, Aug. 17, 1995]

projects, including changes to alteration agreements with lessors.

(c) Request for proposal. (1) The lessor must be provided with a scope of work, including any plans and specifications which have been developed, and should be requested to submit a proposal. The request for proposal should indicate whether progress payments will be made and provide for retainage, when appropriate.

(2) The proposal must be requested to be submitted in such detail that a cost or price analysis can be made.

(3) The requirements for the submission of cost or pricing data outlined in FAR 15.403-4, 15.403-5, and 15.406-2 apply to alteration projects over $500,000. The procedural requirements at FAR 15.403-5 must be followed when requesting cost and pricing data. Exceptions or waivers to submission of cost or pricing data must be processed in accordance with the requirements of FAR 15.403-1. If the lease does not include the clauses at FAR 52.215-10 and 52.215-12 or the clauses at FAR 52.215–11 and 52.215–13, the modification to the lease for the alterations must add the clauses at FAR 52.215–11 and 52.215-13 if cost and pricing data is submitted.

(d) Audits. Unless the cost or pricing data requirement is exempt or waived in accordance with FAR 15.403–1, an audit must be requested for negotiated alteration projects which are not competed as a part of the lease and exceed $500,000.

(e) Evaluation of proposals. The contracting officer shall:

(1) Determine whether the proposal will meet the Government's requirements;

(2) Analyze cost as compared to the independent estimate and the audit;

(3) Analyze profit in accordance with FAR 15.404-4 if the project exceeds $100,000; and

(4) Document analysis leading to negotiation objectives developed from paragraphs (e) (1) through (3) of this section.

(f) Price negotiations. (1) The contracting officer is responsible for exercising sound judgment and may make reasonable compromises as necessary.

(2) The negotiated price should provide the lessor with the greatest incentive for efficient and economical performance.

(3) Negotiations must be documented in accordance with FAR 15.406-3.

(g) Award. Alterations may be procured using the GSA Form 276, Supplemental Lease Agreement, or the GSA Form 300, Order for Supplies or Services (alteration project of $100,000 or less) provided a reference is made to the lease.

(h) Inspection and payment. Final payment for alterations must not be made until the work is:

(1) Inspected by a qualified Government employee or independent Government contractor; and

(2) Certified as completed in a satisfactory manner.

[54 FR 26585, June 23, 1989, as amended at 57 FR 37897, Aug. 21, 1992; 60 FR 19363, Apr. 18, 1995; 60 FR 42800, Aug. 17, 1995; 61 FR 6173, Feb. 16, 1996; 63 FR 18847, Apr. 16, 1998]

(h) All solicitations and contracts which exceed $500,000 must include the FAR clauses at 52.219-9, Small, Small Disadvantaged, and Women-Owned

Small Business Subcontracting Plan, and 52.219-16, Liquidated Damages— Subcontracting Plan.

(i) Solicitations which exceed $1 million must include the FAR provision at 52.222-24, Preaward On-site Equal Opportunity Compliance Review.

(j) When cost or pricing data is required for work or service exceeding $500,000 the FAR clauses at 52.215–10, Price Reduction for Defective Cost or Pricing Data, and 52.215-12, Subcontractor Cost or Pricing Data, must be included in solicitations and contracts.

(k) When the contracting officer determines that it is desirable to authorize the submission of facsimile proposals, the solicitation must include the FAR provision at 52.215-5, Facsimile Proposals.

[60 FR 42800, Aug. 17, 1995, as amended at 63 FR 18847, Apr. 16, 1998]

570.702 Solicitation provisions.

When a solicitation for offers is issued, the contracting officer should include provisions substantially the same as the following unless the contracting officer makes a determination that use of one or more of the provisions is not appropriate:

(a) 552.270-1 Instructions to OfferorsAcquisition of Leasehold Interests in Real Property.

(1) Use Alternate I if the contracting officer decides that it is advantageous to the Government to allow offers to be submitted up to the exact time specified for receipt of final proposal revisions.

(2) Use Alternate II if the Government intends to award without discussions.

(b) 552.270-4 Historic Preference.

(c) 552.270-6 Parties to Execute Lease. [63 FR 18848, Apr. 16, 1998]

570.703 Contract clauses.

(a) The contracting officer shall insert the following clauses or clauses substantially the same as the following clauses in solicitations and contracts for leasehold interests in real property which exceed the simplified lease acquisition threshold unless the contracting officer makes a determination that use of one or more of the clauses is not appropriate. Use of the clauses is optional for those actions which fall at or below the simplified lease acquisition threshold.

(1) 552.270-10 Definitions (Included if 552.270-28 is used).

(2) 552.270–11 Subletting and Assignment.

(3) 552.270-12 Maintenance of Building and Premises-Right of Entry.

(4) 552.270-13 Fire and Casualty Damage.

(5) 552.270–15 Compliance with Applicable Law.

(6) 552.270-16 Inspection-Right of Entry.

(7) 552.270-17 Failure in Perform