1. (a) Pursuant to the Building Authority Division Act, Arkansas Code § 22-2-102 et seq., the Real Estate Services Section of the Building Authority Division is the leasing agency for all state entities (departments, agencies, boards, commissions, and institutions of higher education).
2. (b) The Real Estate Services Section has the responsibility to act as the leasing agent for all state departments, acting either as lessor or lessee, including space in all private sector and public buildings.

3. (c)

   1. (1) The Real Estate Services Section shall, with input from the department, evaluate, determine, and approve the needs of the department.
   2. (2) The Real Estate Services Section shall locate appropriate rental space and act as the agent for the department in negotiation of the lease for the rental space.
4. (d) Pursuant to Arkansas Code § 22-2-114(a)(2), all state departments shall execute and enter into leases with the Real Estate Services Section when requested for the leasing or renting of space and facilities in any public buildings.

5. (e)

   1. (1) Any department making a request for lease space shall submit justification to the Real Estate Services Section in written form with the signature of the department secretary or authorized designee thoroughly outlining the following information:

      1. (A) The department and division or divisions to occupy the space, including a list of positions to occupy the space and the functions of each position by state employment grade;
      2. (B) The date of the request and the date the space is needed;
      3. (C) The number and phone number of the department contact person;
      4. (D) The type of space needed and the location desired, including any special location factors;
      5. (E) The terms desired, budgeted amounts for rents, operational costs, and anticipated moving expenses; and
      6. (F) Any alterations or special requirements, including parking and storage requirements, telecommunication room, library, hearing room, conference room, etc., and the function of those requirements.
   2. (2) List any other pertinent information that would affect the planning of the space needs and the efficient operation of the department, including special HVAC requirements, i.e., ventilation for specific areas and desired office-to-cubicle ratio.
   3. (3) This written request shall be submitted at least ninety (90) days prior to the date the space is needed.
   4. (4) Requests not containing this information shall be returned to the department without action.
   5. (5) The Real Estate Services Section shall locate appropriate space and negotiate a lease between the facility owner and the department.
   6. (6) If space is available in a public building, the lease will be negotiated for placement in the public building.
   7. (7) If space is not available in a public building, then the Real Estate Services Section shall obtain adequate space in a privately owned facility.
   8. (8) It is unlawful for departments to enter into any lease negotiations with any building owner or manager without the approval of the Real Estate Services Section (see Arkansas Code § 22-2-114(a)(1)).

   9. (9)

      1. (A) If such negotiations take place, the lease shall not be ratified.
      2. (B) If the department requests the lease document be ratified, the department shall be required to provide written justification to the Secretary of the Department of Shared Administrative Services for review.

6. (f)

   1. (1) Standards for the utilization of space and the allocation of space to state departments have been approved by the Building Authority Division and are a part of these standards as found in 22 CAR § 114-105.
   2. (2) These standards shall be used as a basis for all planning, leasing of space, allocation of space, and advising state departments on leasing considerations.
   3. (3) When available, the Design Review Section may assist in space planning services through the Real Estate Services Section.

7. (g)

   1. (1) The Building Authority Division has adopted a standard lease form for leasing of privately owned facilities and a standard form for leasing of Building Authority Division owned properties.
   2. (2) Copies of these forms are located at the end of this subpart.

8. (h)

   1. (1) Preferences to leased property within a central business district shall be granted pursuant to Arkansas Code § 22-2-114(a)(5)(A).
   2. (2) The Real Estate Services Section shall grant preferences in accordance with applicable laws and in the following manner.

   3. (3) Guidelines for consideration of lease properties.

      1. (A) Establish a rating system for evaluation. 5 – Excellent. As-is condition meets applicable codes and compliance; premises can easily conform to state’s need and meets space criteria. 4 – Very good. Some modifications are necessary for occupancy but are reasonable and achievable; can conform to the state’s need and criteria. 3 – Acceptable. Numerous modifications and building system replacements or upgrades are necessary to meet codes and compliance, but achievable. Some compromise may be necessary in space planning to satisfy need. 2 – Fair. Extensive modifications are required to meet criteria; space planning for maximum efficiency of space will be compromised; restricting flexibility. 1 – Not acceptable. Modifications required far exceed the feasibility to conform. Structurally inferior and not adaptable to meet the space need and criteria.
      2. (B)

9. (i) Survey area for available properties.

   1. (ii) Upon receipt of space request, the Real Estate Services Section shall research properties available for lease.

      1. (iii) The Real Estate Services Section may choose to advertise the space through the local newspaper or the Building Authority Division website.

      2. (C) Evaluate property:

         1. (i) Survey all properties by visual inspection and assess condition of building systems in consultation with local officials or requesting department;
         2. (ii) Obtain plans or specifications from the property owner, if available;
         3. (iii) Determine property’s ability to conform to space need; and
         4. (iv) Compile a summary of modifications required to conform to state needs.

      3. (D) Obtain proposal:

         1. (i) Provide property owner with a summary of observed modifications recognizing additional modifications may be necessary upon a more extensive inspection;
         2. (ii) Provide property owner with a description of the space request, the specifications, and floor plan, if available;
         3. (iii) Obtain a lease proposal inclusive of the initial recommended modifications and lease criteria; and
         4. (iv) Confirm terms with property owner/agent.

      4. (E) Rate properties by categories:

         1. (i) Divide the available properties into one (1) of two (2) categories:
10. (a) (a) Located within the central business district (CBD); or

11. (b) (b) Located outside the CBD (nonCBD); and

    1. (ii)
12. (a) (a) Rate the properties according to the established rating system listed above.

13. (b) (b) The following factors should be taken into consideration:

    1. (1) (1) Cost-effectiveness by the state to meet the space criteria;
    2. (2) (2) Level of compromise by the state to meet the need;
    3. (3) (3) Specific criteria established by the requesting department; and

    4. (4) (4) Restrictions or impairments in use or access.

       1. (c) (c) Determine the highest rated property for each category (CBD/nonCBD).

       2. (F)

          1. (i) Compare proposals.
          2. (ii) The highest rated CBD and nonCBD properties will be compared.
          3. (iii) If the CBD property meets all criteria and does not restrict or impair the services for which the lease is intended or the rental rates are justified in a nonCBD location, the CBD property will be granted the preference.
          4. (iv) Nothing in these guidelines will prevent the state from leasing with a nonCBD property owner in accordance with Arkansas Code § 22-2-114(a)(5)(A).
          5. (i)
    5. (1) The Real Estate Services Section may utilize a request for proposal (RFP) selection process when locating lease options in response to a department’s request for lease space more than five thousand square feet (5,000 ft²) or for a term up to ten (10) years.

    6. (2) The Real Estate Services Section:

       1. (A) May use a variety of methods to advertise including:

          1. (i) Local newspapers;
          2. (ii) The Building Authority Division website;
          3. (iii) Social media; and
          4. (iv) Other methods; and
       2. (B) Will provide RFP packages to any property owners or managers interested in submitting a proposal in response to the RFP inquiry.
    7. (3) This procedure awards based on selected criteria evaluation.
    8. (4) Those proposals submitted with the proposed physical address found within the CBD of the requested city shall earn the maximum weighted value for the location criteria of the evaluation portion of the RFP selection process unless otherwise stated.
    9. (5) The lease award shall be given to the proposal which, in the opinion of the Real Estate Services Section and the department, serves the best interests of the state and is in accordance with applicable laws and this subchapter.
    10. (6) Nothing in this section shall prohibit the Real Estate Services Section from negotiating directly with a lessor without utilizing the RFP process if it determines it is in the best interest of the state.

14. (j)

    1. (1) The Real Estate Services Section may utilize a formal bid procedure for the leasing of new construction (contract is between the private lessor and the prime contractor) when locating lease options in response to a department’s request for lease space more than five thousand square feet (5,000 ft²) and for a term of fifteen (15) years.
    2. (2) The bidding and award of contracts under the public works laws do not apply.
    3. (3) The Real Estate Services Section may use a variety of methods to advertise this request for formal bids including local newspapers, the Building Authority Division website, social media, and other methods, and will provide formal bid packages to any interested party.

    4. (4) This is a two-step process:

       1. (A) The site submittal or submittals and approval or approvals; and
       2. (B) Submission of a bid consisting of a price per square foot.
    5. (5) Bidders who obtain an option to purchase the sites they propose shall obtain ownership of the property within the time frame established in the bid criteria upon acceptance of their bid.
    6. (6) The state reserves the right to reject any or all bids and to waive any formalities.
    7. (7) At the public bid opening, the Real Estate Services Section shall open and compare the bids and award the lease to the lowest responsible bidder, but only if it is the opinion of the Real Estate Services Section and the department that the best interests of the state would be served and in accordance with applicable laws and this subchapter.
    8. (8) Nothing in this part shall prohibit the Real Estate Services Section from negotiating directly with a lessor without utilizing the bid process if it determines it is in the best interest of the state.

15. (k)

    1. (1) If determined by the Real Estate Services Section to be in the state’s best interest, the Real Estate Services Section may enter into a negotiated lease for a lease term which is longer than any of the terms stated in subsection (i) or subsection (j) of this section should the lessor provide the state or any entities an option to purchase the premises.
    2. (2) While the lessor and the Real Estate Services Section may negotiate additional lease terms and conditions within the lease or subsequent amendments, the standard terms and conditions contained within the approved lease form at the time of execution shall prevail should any conflict arise between any standard terms or conditions and any nonstandard terms or conditions.

Codification Notes: "HVAC" means heating, ventilation, and air conditioning.