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Transmittal Notice

  1. Explanation of Material Transmitted: This revised chapter establishes National Institutes of Health policy and management controls for the acquisition of real property by NIH direct lease or through the General Services Administration (GSA). This policy has been revised to reflect organizational changes, to clarify the process used to acquire real property by direct lease and to streamline processes where possible. 
  2. Filing Instructions:
  • Remove: NIH Manual Chapter 26101-18-1, dated 02/20/2013
  • Insert: NIH Manual Chapter 26101-18-1, dated 12/09/2020
  1. PLEASE NOTE: For information on:

This chapter provides policy and procedures for the acquisition of real property using the National Institutes of Health (NIH) direct lease authority or through the General Services Administration (GSA) to support the needs of NIH Institutes, Centers and Offices (ICOs).

Procedures for the expedited acquisition through Categorical Delegation of space resulting from emergency situations are described in the most recent version of Federal Management Regulation (FMR 102-73.155) See subchapter C-Real Property; 102-73-Real Estate Acquisition; Categorical Space Delegation.

 

The policy in this chapter applies to all NIH Institutes, Centers and Offices (ICOs) that require leased facilities to support the NIH mission.  

The Administrator of GSA delegated leasing authority for general-purpose space below prospectus levels, to the Secretary of the Department of Health and Human Services (HHS), effective October 14, 1996. The Secretary, HHS re-delegated this authority to the NIH and other Operating Divisions within the HHS community effective August 10, 2005.

FMR Bulletin 2008-B1, Federal Register November 19, 2007, established new thresholds for authorization of delegation of up to 19,999 Rentable Square Feet (RSF) or below. Requests for delegations must be approved by the GSA Administrator or the space is acquired by GSA.

FMR Bulletin C-2, Federal Register, April 16, 2014, cancelled and replaced FMR 2008-B1, Delegations of Lease Acquisition Authority Notification, Usage, and Reporting Requirements for General Purpose, Categorical, and Special Purpose Space Delegations. It also established revised thresholds for authorization of general and special purpose delegation of up to 19,999 Usable Square Feet (USF) with delegation remaining below the prospectus threshold. FMR Bulletin C-2 clarifies the conditions, restrictions and reporting requirements specified in the delegation of authority and updates website links, the Simplified Lease Threshold and regulations previously specified in FMR Bulletin 2008-B1.

The Office of Acquisitions (OA), Real Estate Contracting Branch (RECB), Office of Research Facilities Development Operations (ORFDO) is the NIH organization responsible for the acquisition and administration of leased space to support NIH ICOs.

Leasing actions are governed by this manual issuance in accordance with requirements of applicable Federal Acquisition Regulation (FAR), Executive Orders (EOs), FMR, and the General Services Administration Acquisition Manual (GSAM). Newly leased or GSA controlled space may only be acquired if current NIH or HHS inventories are unable to accommodate ICO’s needs.

The rent and operating support services costs of space acquired by NIH direct lease is funded by the Service and Supply Fund (SSF). Other costs to include ORFDO’s Fair Annual Rental Value appraisal, pre- and post-advertising, document reproduction fees and other related services will be funded by the ICO through a direct charge. Renovations and all other applicable costs of an NIH direct lease will be funded through an ICO funding document and GSA leases through a Reimbursable Work Authorization (RWA). For GSA leases, OA/RECB generally is delegated authority to acquire services through the Lessor pursuant to Contracting Officer Representative (COR) authority being granted. The ICO will submit funding documents and RWAs to the OA, ORFDO for review and processing support.

E. Responsibilities

  1. NIH ICOs are responsible for providing written notification to the DFP/ORFDO, when additional space is required;
    1. Providing necessary funding documentation upon DFP’s request;
    2. Providing the ICO’s Executive Officer (EO) or Chief Administrative Officer (CAO) approval of the request;
    3. For working closely with DFP throughout the space acquisition process;
    4. Providing the documentation or information ORFDO needs to pursue a proposed lease acquisition; and
    5. Submitting a Construction Request when design documents are required to renovate space.
  2. The Division of Facilities Planning (DFP)/ORFDO is responsible for:
    1. Development and approval of the ICO’s space requirements;
    2. Ensuring the acquired space meets NIH utilization rate standards; and
    3. Development of master floor plans, including room numbers, space assignment memoranda, for participating in pre-occupancy surveys and monitoring the ICO’s move into the leased space.
  3. The NIH Space Recommendation Board (SRB) is responsible for approving, or disapproving, all space acquisition actions for NIH direct or GSA leases.
  4. The Division of Budget and Financial Management (DBFM)/ORFDO is responsible for:
    1. Review and verification of the availability of funding to support occupancy of GSA and NIH leased space prior to award of a contract; and
    2. Collecting Fee-for-Service (FFS) to support the Division of Design and Construction Management (DDCM), ORFDO support of the leasing process.
  5. The Division of Design and Construction Management (DDCM)/ORFDO is responsible for:
    1. Participating in market and pre-occupancy surveys and development of a Program of Requirements (POR) for special purpose space upon request and funding by the ICO;
    2. Working with DFP to develop design and construction documents to satisfy customer requirements;
    3. Monitoring the lessor's alterations work to ensure the space complies with the lease contract and approved construction drawings;
    4. Reviewing and providing comments regarding space design documents;
    5. Monitoring alterations of space to ensure compliance with the NIH Design Requirements Manual; and
    6. Developing a final inspection checklist of the space in coordination with all stakeholders.
  6. The Division of Environmental Protection (DEP)/ORFDO is responsible for:
    1. Participating in market and preoccupancy surveys;
    2. Managing the NIH NEPA process and assessing the need for further environmental review;
    3. Overseeing necessary environmental reviews prior to awarding a lease;
    4. Reviewing the POR or Real Estate Lease Proposal (RLP) and property records for potential environmental risks and serve as technical advisor on lease offers as necessary;
    5. Reviewing the space design documents; and
    6. Being the central Point of Contact for decommissioning laboratory and clinical space and for chemical decontamination.
  7. The Division of Occupational Health and Safety (DOHS)/Office of Research Services (ORS) is responsible for:
    1. Participating in market and preoccupancy surveys;
    2. Reviewing the POR or RLP;
    3. Reviewing the space design documents; and
    4. Decommissioning requirements for biologicals.
  8. The Division of Physical Security Management (DPSM)/ORS is responsible for:
    1. Review of NIH direct leased space requirements;
    2. Performing a site security assessment and developing recommendations;
    3. Coordinating assessment findings with the stakeholders;
    4. Defining the Scope of Work (SOW) for the security requirements to include equipment and functional requirements;
    5. Participating in vendor evaluation and project requirements as applicable;
    6. Coordinating physical security requirements for complex or large-scale projects with the ORFDO design and construction teams;
    7. Reviewing and providing pre-award concurrence on contracting for new and renewal lease actions; and
    8. Coordinating the security assessment and recommendations for GSA signed leases with the Department of Homeland Security (DHS) and the Federal Protective Services (FPS).
  9. The Division of Technical Resources (DTR)/ORFDO reviews and provides comments on the RLP and design documents, as necessary.
  10. The Office of Acquisitions (OA)/ORFDO is responsible for:
    1. Managing the NIH direct and GSA leased space acquisition process;
    2. Administering leases, or in the case of GSA leases, as delegated;
    3. Establishing Memorandum of Understanding (MOU) with other Federal agencies;
    4. Establishing license agreements;
    5. Reviewing lease attachments, exhibits, etc. that become part of the solicitation or lease contract; and
    6. Assigning, reviewing and approving Contracting Officer’s Representatives (CORs) to support leasing actions.
  11. The Director, ORFDO will provide oversight of the leasing activities performed by each ORFDO Division to ensure timely and within budget delivery of ICO leased space as approved by the SRB.
  12. The Division of Facilities Operations and Maintenance (DFOM)/ORFDO is responsible for assigning a Facility Manager to support ICO handyman services, work tickets and maintenance issues with RECB and/or the Lessor.

 

  1. Scheduling an Acquisition 
    For planning purposes, the following schedules should be used by ICO’s to determine the approximate time needed by ORFDO to acquire space:
    1. GSA acquisitions require a minimum of 18 months from the submission of a space request to award of a lease action below prospectus level;
    2. Schedules are based on acquiring space in an existing building, beginning at the time DFP, ORFDO receives the ICO’s request for space, and ending at the time the space is ready for occupancy; and
    3. If space is to be acquired in a building that must be constructed, assume a schedule of 30 to 44 months to build out the space, based on the complexity of the requirement.
  2. Process to Request Leased Space
    The ICO must initiate the space acquisition process by providing DFP, ORFDO a written request, approved by the ICO EO or Chief AO, to include the following:
    1. Assurance an Environmental Review will be conducted with the initial space request;
    2. General description of the characteristics of the requested space(s) desired;
    3. Estimated minimum and maximum time the requested space will be needed;
    4. Actual number of personnel to occupy the requested space(s) by employment classification and grade;
    5. Identification and a comprehensive description of the program activities to be conducted in the requested space;
    6. Geographic area to be considered; and
    7. Statement by the EO or Chief AO that the budget for the ICO includes funding for the space request to include all acquisition costs, i.e., appraisal, advertising, document reproduction and ORFDO services.
  3. Lease Management and Oversight Process (LeMOP)
    The LeMOP is illustrated inAppendix 1.The key steps for this process are described below:
    1. Critical Decision 1 (CD-1): The Space Recommendation Board (SRB) approval of the ICO’s programmatic need, in concept, is necessary prior to proceeding with the development of a business case. The analyses and documentation are provided to the CD-0 deciding official prior to their action are:
      1. Due Diligence 1-1 (DD1-1): Business Case for the Requirement
        • The ICO submits a request for lease action (new or replacement) of expiring lease. It must explain why the new requirement cannot be met within current space occupied by the ICO or in the case of replacement lease, the continuing need for lease space.
        • DD1-1 is prepared by the ICO with assistance as necessary from the ORFDO DFP and the DDCM.
      2. Due Diligence 1-2 (DD1-2): General Estimate Range of Life-Cycle Cost.
    2.  Critical Decision 2 (CD-2): SRB’s Approval of the General Strategy for Meeting the Need. Analyses and documentation are provided to the CD-1 deciding official for processing, as listed below:
      1. Due Diligence 2-1 (DD2-1): Business Case for Proposed Strategy Based on Alternative Means.
        • DD2-1 is prepared by the ICO with assistance as necessary from the ORFDO DFP, DDCM and OA.
        • The business case will define the proposed project development strategy and an acquisition strategy.
        • The business case should demonstrate the proposed strategy to find the preferred means of meeting the programmatic need.
        • The conclusion should be based on an evaluation of feasible alternatives.
      2. Due Diligence 2-2 (DD2-2): Life-Cycle Cost Benefit Estimates of Alternatives.
        • DD1-2 is prepared by the ICO.
        • The life-cycle cost benefit analysis of alternatives is a critical part of the business case.
        • The analysis should identify the net present value of the “full cost” estimate of the initial costs, operating costs and salvage costs if any.
        • If benefits are difficult to quantify, in dollars and cents, a decision analysis may be used in lieu of a strict capital finance model. In any case, the net present value of expenditures should be used.
        • If portions of the “full costs” are borne by entities other than the benefiting entity, discounting will follow OMB Circular A-94 Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs.
      3. Due Diligence 2-3 (DD2-3): Concurrence with soundness of the cost benefits analysis.
        • The ORFDO DBFM will review and comment on the cost benefit analysis and when it is acceptable, concur with its assumptions and findings.
      4. Due Diligence 2-4 (DD2-4): Concurrence with feasibility of acquisition strategy.
        • The ORFDO OA will review and comment on the recommended acquisition strategy described in the business case and when it is acceptable, concur on its appropriateness.
      5. Due Diligence 2-5 (DD2-5): Identification of regulations, standards and guidelines effecting recommended strategy.
        • The ORFDO OA with the assistance of the ORFDO Office of the Director, the DDCM and, as needed, the Office of the General Counsel (OGC) identifies the laws, regulations, standards and guidelines applicable to the proposed action, which will be provided to the ICO for reference.
    3. Critical Decision 3 (CD-3): Space Recommendation Board (SRB) Approve Detailed Strategy for meeting the need. The analyses and documentation to be provided to the CD-2 deciding official precedent to his/her action are:
      1. Due Diligence 3-1 (DD3-1): Detailed Program of Requirements.
        • The ICO will work with an ORFDO Project Officer and professional consultants, as necessary, to prepare a detailed POR.
        • If an environmental assessment or impact statement is required, the agency decision must be signed by the ORFDO Director prior to award of the lease.
        • The POR will conclude with an environmental review meeting facilitated by the DEP to determine the need for further review.
      2. Due Diligence 3-2 (DD3-2): Acquisition Plan.
        • The ORFDO Project Officer will work with the ICO and ORFDO Contracting Officer to prepare an “Acquisition Plan,” in accordance with HHS acquisition policy.
        • The Acquisition Plan may include data developed as part of the LeMOP.
        • The Contracting Officer must concur with the Acquisition Plan before it is transmitted to the CD-2 deciding official.
      3. Due Diligence 3-3 (DD3-3): Government Cost Estimate.
        • In accordance with HHS and FAR acquisition procedures, the ORFDO Project Officer will prepare a government cost estimate for the requirement.
      4. Due Diligence 3-4 (DD3-4): Concurrence with Government Cost Estimate.
        • The ORFDO Division of Budget and Financial Management (DBFM) will review and comment on the Government Cost Estimate and when it is acceptable, concur with its assumptions and findings.
      5. Due Diligence 3-5 (DD3-5): Affirmative test against regulatory financial limits and controls.
        • The ORFDO DBFM conducts an independent test of the planned lease contract against regulatory controls for prospective level and operating leases based on the lease rate, lease term, lease escalations, one-time lump sum payments and renovation expenses, etc. provided by the ORFDO Project Officer and the warranted Lease Contracting Officer.
        • The ORFDO OA RECB will confirm with GSA, NIH and HHS that no inventory exists that meets the space requirements.
      6. Due Diligence 3-6 (DD3-6): Funding Strategy.
        • The ICO will provide a written statement of how it plans to fund the lease action.
        • The Proposal will be forwarded to OFM for review and future concurrence.
    4. Critical Decision 4 (CD-4): Program Approval to Contractually Bind the Agency and Obligate Funds. The analyses and documentation are provided to the CD-1 deciding official prior to any action are:
      1. Due Diligence 4-1 (DD4-1): Follow the NIH Global Leasing Process for implementing a lease action whether by NIH Direct Lease or GSA lease, (Appendix 1).
      2. Due Diligence 4-2 (DD4-2): OGC’s approval of lease contract.
      3. Due Diligence 4-3 (DD4-3): Program acceptance of technical evaluation and recommended selection. This is a formal acceptance by the ICO program official of the acquisition team’s evaluation of offers and recommended selection.
      4. Due Diligence 4-4 (DD4-4): OFM’s formal approval of Funding Strategy for the acquisition (DD3-6) is acceptable and that adequate NIH budget authority is available to support the proposed action.
      5. Due Diligence 4-5 (DD4-5): Signed Funding Document.
      6. Due Diligence 4-6 (DD4-6): Affirmative test of final agreement terms against regulatory financial limits and controls.
        • The ORFDO Division of Budget and Financial Management will test the final offer against the regulatory limits to determine, if the proposal conforms to applicable rules for prospectus levels, operating lease, etc.

H. Definitions

Acquisition Plan: A comprehensive or simplified narrative relating to the acquisition that includes Project Information, Acquisition Background and Objectives, Statement of Need, Applicable Conditions, Delivery or Performance-Period Requirements, Trade-Offs, Risks, Plan of Action, Competition, Acquisition Milestones, etc.

Acquisition Strategy: A high-level description of acquisitions to allow senior leadership and other authorities to assess whether the strategy makes good business sense, effectively implements laws and policies and reflects management’s priorities.

Base Rent: The negotiated rental rate per square feet based on the market rate at the time the lease is acquired.

Business Case: As part of the Lease Management and Oversight Process (LeMOP), includes the Space Justification Document (SJD), proposed leasing strategy, options evaluation, the location preference, a preliminary cost estimate to assist in determining the lease type (Capital or Operating) and alignment with the prospectus ceiling and a memo from the ICO management committing the necessary funds.

Categorical Space:  A standing delegation of authority from GSA to a Federal agency to acquire a type of space identified in FMR §102-73.155, subject to limitations in this part.

Classification Space: The broad identification of space into one of the twelve classifications found in the Federal Management Regulations (FMR), Part 101-17.

Client Project Agreement: A collaborative document that helps define a project’s strategic requirements and other occupancy considerations. This is a requirement for all GSA lease acquisitions and is prepared using GSA’s template.

Construction Drawing: A detailed set of drawings based upon design intent drawings, supplemented by the specification document, describing construction materials, equipment and electrical, lighting, plumbing and mechanical systems. Together, these documents describe the specific requirements needed to perform alterations to a space.

Contracting Officer Representative: (GSA leases only) – GSA may issue Contracting Officer Representative (COR) authority in accordance with the designation of COR authority between the General Services Administration (GSA) and the NIH, governing the management of a GSA-leased facility through the Office of Acquisitions, ORFDO.

Delineated Area: Identifies the extent of the boundaries or area (north, south, east and west) for which the lease space will be considered. NIH delineated area has expanded due to Competition in Contracting Act (CICA) requirements which includes parts of Montgomery and Prince Georges Counties.

Design Intent Drawings (DID): Preliminary drawing showing the location of partitions, electrical, mechanical, plumbing, furniture and telephone/data outlets and annotated to indicate the location and type of interior finishes and special requirements. Laboratory DID (15%) are more fully described in the NIH Design Requirements Manual. The drawing shall be based upon the Program of Requirements, Request for Lease Proposals (RLP) and all applicable technical requirements included in the RLP and local building codes and serves as the basis for estimates and for completing construction drawing.

Direct Charge: All charges relating to special use space i.e. research, laboratory, clinical, or other special or categorical use space is paid by the acquiring ICO.

Emergency: An extraordinary event such as a fire, natural disaster or threat to the health and safety of occupants of a space which renders the current space unsafe, unusable and requires that it be vacated or repaired immediately.

Environmental Review: Consideration of the potential environmental impact(s) and mitigation strategies of a proposed acquisition.

Fair Annual Rental Value (FARV): The estimate of the probable annual rent amount reasonably expected for the right to the agreed use of real property as established by competition in the rental market.

Federal Management Regulations (FMR): The Government-wide real property acquisition and management regulations, issued by GSA, that govern delegated real property activities of Federal agencies.

Funding: Provided through the SSF, rent costs for space paid indirectly to GSA or Lessor through the Department of the Treasury and charged to the SSF. The ICO will contribute to the SSF through the normal SSF assessment cycle. IC’s requiring services (for list of services, contact RECB (301) 402-0878) above the standard lease agreement, e.g. renovations, Handyman, etc. under a NIH direct lease must submit a funding document and in the case of a GSA lease where NIH does not have COR authority, a Reimbursable Work Authorization (RWA).

General Purpose Space: Space without extraordinary features or building environmental systems that is suitable for office and office support or related activities.

General Services Administration Acquisition Manual (GSAM): GSA’s supplement to the Federal Acquisition Regulations (FAR) that establishes policies for the acquisition of space by lease contract as delegated to GSA under the Federal Property and Administrative Services Act of 1949.

Government Demised Area: Building, floor, suite or space, defined as being occupied by the NIH.

Impact Statement: An explanation of why space is needed and what impact on an ICO’s program activities will result if the space is not acquired.

Integrated Project Team (IPT): This team includes all stakeholders. A written IPT will be provided by the RECB with comments by the stakeholders.

Justification for Other than Full and Open Competition: Document that justifies proceeding with a lease action without providing full and open competition, such as a sole source contract, or a contract resulting from an unsolicited proposal.

Leasing Delegation Authorization Request Application: GSA requires all delegation requests to include a Leasing Delegation Authorization Request Application that includes an extensive narrative with backup documentation to support the NIH request for delegation.

Lease: Direct: A lease contract awarded by NIH and signed by its Contracting Officer under delegated leasing authority where NIH has full and exclusive contract administration rights and responsibilities.

Lease: GSA: A lease contract negotiated by GSA and signed by its contracting officer where GSA has full and exclusive contract administration rights and responsibilities.

Lease Management and Oversight Process (LeMOP): A process managed by the NIH ORFDO that is structured around four (4) critical decisions. Each of these decisions is a go/no-go point in a process that begins with a program (ICO) identifying a requirement and ends when the requirement has been satisfied. The specified analyses are provided to the decision maker and are used in explicitly determining and supporting each critical decision. See Appendix 1.

Leasing Authority: Delegated: NIH’s authority to acquire space that originates from either GSA or the FMR and has been formally re-delegated to an NIH official. Delegations include General Purpose, Special Purpose and Categorical space.

Leasing Authority: Statutory: Legislative authority to acquire space that is granted directly to the Department or its operating Divisions.

National Environmental Policy Act (NEPA) Review: The process to assess the potential impacts of an action, required for any lease action and can include one or more of the following: Determination that the action can be categorically excluded from further review; the action requires an environmental assessment; or the action requires an environmental impact statement. Note: ICOs are responsible for funding environmental assessments and impact statements.

Operating Support Services: Generally includes cleaning, janitorial, heating, electrical, plumbing, air conditioning, elevator and other miscellaneous services.

Program of Requirements (POR): A comprehensive document which describes the full range of objectives to meet an ICO’s needs. The full range of objectives includes unique requirements, usable and rentable square feet, type of space, room data sheets, staffing levels, design requirements, etc. This document provides the technical basis; is part of the lease contract; drives the cost for the Lessor and Government and establishes responsibilities, etc.

Prospectus Level: The size of the lease acquisition in which the annual rent (excluding the operating and maintenance costs) exceeds GSA’s annual prospectus thresholds as referenced in Section 102-73.35 of the Federal Management Regulation (FMR).

Request for Lease Proposals (RLP): The document that is the basis for space requirements, specification, roles and responsibilities, evaluation of offer, etc. and that is used in the acquisition process to determine which prospective lessors can provide the requested lease space.

Service and Supply Fund: A funding mechanism created to fund a variety of centralized research, leases and support services and administrative activities that are required for the efficient and effective operation of all NIH programs and facilities.

Space for Long-Term Use: Acquisition of space for a term period generally exceeding five (5) years.

Space for Short-Term Use: Acquisition of space for a term period generally of five (5) years or less.

Special Purpose Space: An agency space delegation that is a standing delegation of authority from the Administrator of General Services to specific Federal agencies to lease their own special purpose space (identified in FMR §102-73.170 through §102-73.225, subject to limitations in this part. The HHS is delegated authority to lease laboratories (lease terms, including all options, limited to 5 years).

Standard Lease Form L201C: U.S. Government Lease for Real Property which incorporates the RLP and other relevant documents into the “Lease”.

Substantial Completion: Physical inspection of the space by the Lessor and Government per the terms of the Lease. If the terms of the Lease are met, the space is accepted as substantially complete and rent charges generally will commence.

Survey-Market: An analysis of market conditions that reflects similar space in the delineated area in the acquisition of lease space. Market survey includes CoStar search, historical data, commercial broker data and other data that reflects Government needs.

Work Authorization (RWA): An agreement for GSA to perform certain work at a stated cost and a method to pay GSA for the work, whether GSA does it directly or indirectly. The work is above the standard level of service provided by GSA.

I. Internal Controls

  1. Office Responsible for Reviewing Management Controls Relative to this Chapter: Through this manual issuance, the Office of Acquisitions, ORFDO is responsible for the method used to ensure that management controls are implemented and working.

  2. Frequency of Review: Ongoing review.

  3. Method of Review: The Office of Acquisitions, ORFDO will maintain oversight and ensure effective implementation and compliance with this policy through review of a myriad of resources, e.g., inquiries received from NIH Administrative and Executive Officers, when regulations change, and various system-generated reports.

  4. Review of Reports:  Reports are sent to the Director, ORFDO, and the Deputy Director for Management (DDM), NIH.  Reports will indicate if controls are in place and working.  Any adverse management control issues will be brought to the immediate attention of the Director, ORFDO.

Appendix 1 NIH Global Leasing Process

The following PDF document is a flow diagram offering an illustration of the procedures contained in Section G. Procedures, 3. Lease Management and Oversight Process (LeMOP).

Exhibit_1-NIH_Global_Leasing_Process.pdf


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