Section 18.502. Leasing of facility space; legal lessee; attorney general and board approval of lease required; competitive award process required specifications; objectives; justification of rent and rate increases required; options.

(1) Pursuant to sections 4 and 13 of Act No. 51 of the Public Acts of the First Extra Session of 1948,  as  amended,   being   SS18.4   and

18.13    of the Michigan Compiled Laws, facility space for the various state departments  shall   be  leased  in  a  manner  which  provides   an   equal opportunity for all individuals to participate in the procurement process insofar  as  there  is  no abrogation of the  director's   authority  to   award contracts which he or she deems to be in the best interest of  the  state.

(2)   The state of Michigan is the legal lessee of all  property  occupied and rented by a state department or agency. An individual state department or agency shall not lease property in the name of the department or agency unless specifically authorized by statute.

(3)   All lease contracts are subject to the approval of the  attorney general as to legal form.

(4)   All lease contracts are subject to the approval  of   the  state administrative board prior to execution by the director.

(5)   Unless otherwise waived by the director, the  awarding  of  lease contracts shall be determined through a competitive bid proposal or sealed bid process. If waived, lease terms shall be subject to a complete market analysis or financial analysis, or both,  to   substantiate   the   rental amount.

(6)   Specifications shall be written to encourage overall economy and efficiency through maximum competition in providing facilities, building space, equipment, services, and supplies to satisfy the state's needs.Specifications shall not be unduly restrictive.

(7)    Sites or locations for leased space shall be evaluated consistent with the following criteria:

(a)   Consolidating a state department, agency, or departments into 1 building if practical.

(b)   Providing maximum occupancy of state-owned and leased facilities.

(c)   Centralizing a department, agency, or departments into downtown areas if practical.

(d)   Complying with policies and directives from the governor or director which are in the best interest of the state.

(e)    Entering into lease contracts with local governments if possible to take advantage of their tax-exempt status and to encourage joint location of government services.

(f)  Protecting the  health,  safety,  and welfare of  the  public   and employees.

(8)   Lease contracts renewed through negotiation shall  justify   any increases in rental rates through comparative data. If a renewal includes renovations or additional construction, costs shall be substantiated and rental rates justified through market analysis or financial   analysis,   or both.

(9)   The director may option a  specific   site  or  sites   which  meet    a department's or agency's program needs, subject to the following criteria:

(a)   The fair market value of the site or sites shall  be  determined  by appraisal.

(b)    Any deposit money required by an option shall be paid by the user department or agency.

(c)   Purchase options for the acquisition of property for state use which specify a deposit in an amount greater than 1 dollar  shall  contain  a clause that  the  owner shall return the deposit money to the user department or agency if the option is not exercised. The requirement for this clause in a purchase option may be waived by the director  for  good cause when deemed in the best interest of the state.

(d)  The state has the right  to  assign an option  to  the   successful bidder.

History: 1983 AACS.