STATE OF ILLINOIS
PROCUREMENT POLICY BOARD
David Vaught, Chairman
Members: Michael Bass, Ed Bedore, Ricardo Morales, Diego Ferrer
511 WEST CAPITOL, SUITE 102, SPRINGFIELD, IL 62704
Telephone: (217) 785-3988 Fax (217) 557-9927 TTY (888) 642-3450
PPB
PROPOSED CONTRACT REVIEW
DATE OF REVIEW: August 17, 2010 DATE OF AWARD: August 12, 2010
REFERENCE NUMBER: 22019989
PURCHASING AGENCY: Illinois Department of Central Management Services
USING AGENCY: Illinois Department of Human Services
STATE PURCHASING OFFICER: Gwyn Gurgens TELEPHONE: 217-558-2586
TITLE: CMS – 6277 – Notice of Lease Award – DHS – Marion
PROCUREMENT APPROACH: RFI
TOTAL VALUE: $1,290,000.00
LENGTH OF TERM: 11/01/2010 – 10/31/2015 with One 5-year Renewal
VENDOR SELECTED FOR AWARD: James Reichert Family Limited Partnership
NO. OF UNSUCCESSFUL VENDORS: 1
OVERVIEW:
On August 17, 2010, the Procurement Policy Board placed the CMS lease award for DHS in Marion under review. The Procurement Policy Board is
concerned with the policy of lease solicitation and award when CMS does not have current standards in Rule by which it makes its leasing decisions.
Administrative Rules date to 1982 and no guidelines appear to exist for making award determinations in competitive leasing environments.
Lease timeline:
1985 – Lease 4121 Executed at 102 E DeYoung Street in Marion
1994 – Lease 5239 Executed as a result of a RFI at 1107 W DeYoung Street in Marion
02/2009 – RFI released for consolidation of leases 4121 and 5239 – incumbent lessor at 5239 was chosen as the lowest cost option
12/22/2009 – 364-day lease issued for 02/01/2010 – 01/30/2011 – Comptroller stopped payment as of May 2009
02/17/2010 – CMS presents lease 5239 to the PPB as an Alternate RFI vs. awarding the RFI due to incumbent lessor being chosen as the
lowest cost option of the 02/2009 RFI and agency already occupying the space. Costly, extensive improvements would be required under the
RFI. Lessor would provide new carpet and paint throughout, balance HVAC and repair roof.
03/17/2010 – PPB Objects to Lease – excerpt from the minutes:
Next on the agenda was DHS #5239 at 1107 W. DeYoung in Marion. Mr. Baptist stated that the total square footage is 10,875 of
space. Lease #4121 is being terminated at 102 W. DeYoung also in Marion and will be relocated into this lease. Base rent is $11.50
for the term and the State will cover the cost of utilities. The total square foot per employee is 225. There is also a security guard
that will be terminated on March 31, 2010 that will be taken out. Member Bedore stated that this is a 17% increase. If you take the
total rent over term and add the two leases it is still less than the proposed lease by $203,000. Mr. Kanellopoulos replied that
Member Bedore is correct. This lease was bid out and CMS received four responsive proposals and the incumbent lessor was the
lowest bid received. CMS was able to achieve a lower rate than the one proposed in the RFI because it would have involved a build
out of merging these two offices and was able to accommodate it in the existing space. Member Bedore stated that there is no doubt
that there are reductions in the square feet and everything else, but there is also an 18% increase in the base rent. Member Bedore
made a motion to reject this lease and go back and re-negotiate for a lower rate. The motion was seconded by Member Bass. With
a 4-1 vote with Chairman Vaught voting “no” the motion was approved to reject this lease.
04/30/2010 – CMS issued RFI for 10,000 square feet for Lease 6277 – a reduction of 2,425 square feet
08/12/2010 – CMS awards Lease 6277 to incumbent lessor
Items of Note:
o Lease 5239 as presented to the PPB for the 03/17/2010 meeting showed consolidation totals of 36 employees and 12,425 square feet.
o Lease 6277 as presented as a result of the RFI process shows consolidation totals of 25 employees and 10,000 square feet
o Lease 6277 gives the agency the option to expand the lease by 3,000 square feet after lease execution
PPB Staff made a site visit to 1107 W DeYoung Street in Marion on August 24, 2010 and observed the following:
White paper submitted by CMS on August 2, 2010 states that Security was eliminated in March – a security guard was present in the waiting
room of the facility
White paper also states Actual, Budgeted, and Total headcount at 25, while the agency stated to us that there were 30 permanent employees
and two interns for a total of 32
Ceiling tiles replaced on August 20, 2010 were already water damaged 4 days later
HVAC issues – one area of the space was quite cool, while another area in the facility was extremely warm and yet another was warm, and
also very humid and uncomfortable
