Line 8 - Lump Sum Cost of Alterations - Consult with representatives of the local
engineering element and local contractors who are familiar with VA contracting and the
type of alterations required by the specifications.
Line 9 - Market Comparable Average Annual Gross Rent - This represents the total
annual rent paid to the landlord. In certain markets and for certain buildings, this may
include all services such as janitorial and utilities or only some services. Determine
exactly which services are included in the rent. Market comparable average annual rents
may be obtained from knowledgeable sources such as brokers, agents, industry
publications, GSA, and other Federal agencies with delegated leasing authority. If the
rent is stated in terms of dollars per rentable square foot ($/RSF), then the rental rate
must be converted into dollars per USF. To do this use the following formula:
[Rent in $/RSF] x [1 + Common Area Factor] = [Rent in $/USF]
Results of this informal survey may be recorded on GSA Form 2991, Lease Market
Survey (see Appendix D) for convenience.
Line 10 - Market Comparable Cost of Landlord Provided Services - This is an estimate
of the cost of services provided by the lessor and included in the rent. An estimate of
these costs may be obtained by determining what a third party contractor would charge
for similar services in that marketplace. Calculate the total annual charge for those
services and then divide that total annual charge by the Line 5, Total USF. Consult with
Engineering Service and landlords in the marketplace to determine this number. Any
costs stated as $/RSF must be converted to $/USF using the formula for Line 9.
Line 11 - Average Annual Net Rent - Line 9 plus Line 10.
Line 12 - Cost of VA-Provided Services - VA often requires and contracts for its utilities
independent of the lessor. Obtain an estimate of this cost from Engineering Service.
Determine the annual cost of these services and divide that cost by the total USF.
Line 13 - Total Cost of Services and Utilities - Line 10 plus Line 12.
Line 14 - Annualized Cost of Lump Sum Alterations - This is a straight-line annualized
allocation of VA's cost of alterations. Non-Government tenants sometimes finance this
cost. For the purposes of this calculation, the VA will not be financing the cost of
alterations. Calculate this number by dividing the total cost of alterations by the number
of years on the holding period and then divide that number by the total number of USF.
BENEFIT COST ANALYSIS -- 2 of 11
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