B-310980; B-310980.2; B-310980.3, Fedcar Company, Ltd., March 25, 2008
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release.
Decision
Matter of: Fedcar Company, Ltd.
File: B-310980; B-310980.2; B-310980.3
Michele
M. Brown, Esq., David S. Black, Esq., Thomas M. Brownell, Esq., Allison V.
Feierabend, Esq., and Robert C. MacKichan, Jr., Esq., Holland & Knight LLP,
for the protester.
Fernand A. Lavallee, Esq., Jeffrey R. Keitelman, Esq., and J. Philip Ludvigson,
Esq., DLA Piper US LLP, for the intervenor.
Carl E. Smith, Esq., General Services Administration, for the agency.
Nora K. Adkins, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Where an agency bases its
source selection decision for the award of a lease on incorrectly calculated
costs, the source selection is not reasonably based.
2. Source selection document that only discusses
strengths of awardee’s higher-rated, higher-priced proposal but not its
weaknesses, or the strengths and the weaknesses found in protester’s slightly
lower-rated, lower‑priced proposal does not reasonably justify tradeoff
decision.
3. A purported acceptance of a lease
offer by the General Services Administration that is conditioned on the
offeror’s assent to terms additional to, or different from, those offered is
not an acceptance, but a counteroffer, and does not create a binding lease
contract.
DECISION
Fedcar Company, Ltd. protests the award of a lease contract to Duke
Realty Limited Partnership by the General Services Administration (GSA) under
solicitation for offers (SFO) No. GS-05B-18064, for the construction and lease
of a dedicated campus facility in
On
The original acquisition plan contemplated that GSA would
obtain a no-cost, assignable option for a specified land site, which would be
assigned to the successful offeror, who would then construct a building on the
site that would be leased to GSA for occupancy by the FBI. However, GSA was unsuccessful in its efforts
to acquire a no‑cost assignable option for any of the land sites
preferred by the FBI, and on March 16, GSA received a request from the FBI to
move forward with prospective offerors submitting their own sites. GSA thus amended the Phase I SFO on June 19
to allow developers to offer their own sites with their Phase II
proposals.
The Phase II SFO required offerors to provide land site, technical, and price proposals. The SFO specified that the offerors’ proposed land sites were required to meet certain minimum requirements in order to be considered responsive to the solicitation, as follows:
1.7 UNIQUE LAND SITES REQUIREMENTS
- As part of the Phase II offer, each invited team is required to submit one or more land sites that meet the criteria listed in Paragraph B. The Government will survey the offered sites after receipt of Phase II offers. Site elimination shall be based on Government Security personnel feedback and noncompliance with the minimum site requirements. GSA will not evaluate submitted proposals that do not meet the stated criteria.
- Sites must comply with the following minimum requirements:[1]
* * * * * 5. Site not located in industrial areas, near oil tanks, or adjacent to gas stations.7. Traffic in/around the site should be limited and a low volume of street traffic should pass in front/around the proposed site.12. Site should eliminate/minimize exposure or vulnerability to overlooking elevations, overlooking buildings, overpasses, elevated roadways, or railroad tracks.
SFO, as amended, at 10-11. The land site requirements were evaluated on a “go/no‑go” basis. A proposal that did not receive a “go” determination would not be considered further for award.
The Phase II technical evaluation was based upon four
evaluation factors listed in descending order of importance: appropriateness of facility design, appropriateness
of building system, appropriateness of exterior/interior design, and management
plan.
On June 30, 13 offerors submitted Phase I proposals to
GSA. Agency Report (AR), Tab 35, Price
Negotiation Memorandum (
GSA conducted a go/no-go analysis of each site proposed by
the remaining offerors, and on
After technical and price evaluations and discussions and negotiations with the four remaining offerors based on the three remaining sites, GSA made award to offeror A on March 23.[5] As part of the lease contract, offeror A agreed to provide to the contracting officer within 120 days after award of the contract (July 21) evidence of the site purchase. Offeror A defaulted on its commitment to provide evidence of site purchase and the lease was terminated.
On September 7, the agency reopened negotiations with the remaining three offerors by issuing an amendment to the SFO that provided:
Offerors will have the opportunity to refresh proposed pricing, address the weaknesses of the facility design concept and enhance other areas of the offer deemed necessary. However, Offerors will not have an opportunity to submit an alternate site, an alternate design proposal, or significantly redesign the current proposal.
AR, Tab 1L, amends. 1 and 12, at 1.[6] In response, the remaining three offerors
submitted final revised proposals. Only
the offerors’ technical and price proposals were evaluated.[7] Offeror B’s offer was excluded from
consideration because its final revised proposal did not comply with key
requirements of the amended SFO.
In its protest, Fedcar asserts, among other issues, that
Duke’s site was unacceptable and should have been rejected because it failed to
meet 3 of the 14 requirements, which were minimum requirements of the
solicitation.[8] Specifically, Fedcar contends that Duke’s
site did not meet the following unique land site requirements: site not located in industrial areas, near
oil tanks, or adjacent to gas stations; traffic in/around the site should be
limited and a low volume of street traffic should pass in front/around the
proposed site; and site should eliminate/minimize exposure or vulnerability to
overlooking elevations, overlooking buildings, overpasses, elevated roadways,
or railroad tracks. Fedcar alleges that
Duke’s site is located within an industrial park, named Park 100; has heavy
traffic along
In reviewing protests against allegedly improper evaluations, it is not our role to reevaluate proposals. Rather, our Office examines the record to determine
whether the agency’s judgment was reasonable and in accord with the evaluation
factors set forth in the RFP. Abt Assocs., Inc.,
B-237060.2,
As noted, the agency’s “go/no-go” site analysis had been
previously conducted by members of the SSEB on
In response to the specific
concerns noted in the protest, GSA asserts that Duke’s site is located within a
corporate park that is zoned special commercial, not industrial; the minimal
traffic in the area does not travel through or in front of the site; and [DELETED]
minimize exposure or vulnerability from any overlooking elevations and railroad
tracks.
Based on our review,
we find that the agency’s evaluation of Duke’s site was reasonable, in
compliance with the SFO’s stated evaluation criteria, and supported by the
record. While Fedcar disagrees,
arguing that Duke’s site is, in fact, in an industrial park and that the
agency’s evaluation documents are insufficient to support a determination that
Duke’s site met the requirements, we find that the record reasonably supports
the agency’s determination that Duke’s site satisfied the land site
requirements.[11]
In this regard, the record confirms the
agency’s assertion that Duke’s site is near, but not in, an industrial
park. COS at 2; AR, Tab 26, Duke’s Phase
II Technical Proposal, at A-7, Official Zoning Status; AR, Tab 8, C-S Special
Commercial District zoning regulations.[12] Fedcar’s mere disagreement with the agency’s judgment does not
establish that the site evaluation
was unreasonable.[13]
Fedcar also asserts that the agency’s price evaluation was unreasonable because the agency inserted incorrect numbers into the price evaluation spreadsheet, which resulted in an error in favor of Duke’s present value ANSI/BOMA office area per square foot price.
In its report, the agency admits that it erred in
calculating the present value of the rent being offered by Duke, and that,
instead of a price difference of [DELETED] per ANSI/BOMA square foot, the
actual price advantage of the rent offered by Fedcar was [DELETED] per
ANSI/BOMA square foot. Supplemental AR (
We disagree. As
indicated above, the record shows the technical evaluation of the two proposals
was relatively close with Duke’s technical proposal having only a [DELETED]-point
advantage (out of 100 points) over Fedcar’s proposal. AR, Tab 35, Price Negotiation Memorandum (
While the agency argues that the outcome of the SSA’s
cost/technical tradeoff would be the same regardless of the re-calculated
price, our Office affords little weight to an agency’s post-protest arguments
that are based on judgments the agency asserts it would have made because such
judgments made in the heat of litigation and based on facts that were not
previously considered that are materially different from those on which the
agency relied in making the original decision may not
represent the fair and considered judgment
of the >agency. Global,
A 1st Flagship Co., B-297235.2,
Moreover, as noted by Fedcar, the source selection
document selecting Duke for award set forth the strengths found in Duke’s
proposal, but did not discuss that proposal’s weaknesses nor the strengths
found in Fedcar’s proposal. AR, Tab 35,
Price Negotiation Memorandum, at 3‑4. The result was that the source selection
document did not reasonably address the differences between the offers. An agency which fails to adequately document
its source selection decision bears the risk that our Office may be unable to
determine whether the decision was proper.
Johnson Controls World Servs., Inc., B-289942, B‑289942.2,
We sustain the protest.
Since the lease does not contain a
termination for convenience clause, we would customarily find that remedial
action that may disturb the award is not feasible; in the absence of a
termination for convenience clause, we would ordinarily not recommend
termination of an awarded lease, even if we sustained the protest and found the
award improper. Peter N.G. Schwartz
Co. Judiciary Square Ltd. P’ship, B‑239007.3,
Here, however,
Fedcar argues that remedial action is appropriate because no legally binding
lease contract between GSA and Duke was formed.[14] Based
on our review of the record, we agree with Fedcar that GSA did not form a
legally binding lease contract with Duke because it did not unconditionally
accept Duke’s offer. In this regard, the
record shows that on December 17, 2007, when GSA accepted Duke’s offer and
notified Duke of the award, GSA forwarded to Duke a draft lease containing
various changes from the terms of the SFO and Duke’s offer, and requested that
Duke execute and return the lease. AR,
Tab 13, GSA’s Award Letter (
A purported
acceptance of an offer that is conditioned on the offeror’s assent to terms
additional to or different from than those offered is not an acceptance but a
counteroffer, and does not create a binding contract. 1st Home Liquidating Trust,
et al. v.
Because GSA has made material changes to the lease agreement from those contained in the SFO, we recommend that GSA amend the SFO and obtain revised proposals. We also recommend that GSA make a new source selection decision taking into account the correct present value ANSI/BOMA office area per square foot price of the offers. In so doing, the agency should fully document its cost/technical tradeoff, including a comparison of the proposals’ strengths and weaknesses as well as the evaluated price difference. In the event that Fedcar’s proposal is found to be the best value, award should be made to that firm. We also recommend that Fedcar be reimbursed the reasonable costs of filing and pursuing the protests, including reasonable attorneys’ fees. 4 C.F.R. sect. 21.8(d)(1). Fedcar should submit its certified claim for costs, detailing the time expended and costs incurred, directly to the agency within 60 days after the receipt of this decision.
Gary L. Kepplinger
General Counsel
[1] Fourteen requirements are listed, but we list only those requirements at issue in this protest.
[2]
GSA recognizes the ANSI/BOMA international standard definition for office area,
which means “the area where a tenant normally houses personnel and/or
furniture, for which a measurement is to be computed.” SFO, as amended, at 57. ANSI/BOMA office area square feet and usable
square feet are terms that can be used interchangeably.
[3]
The present value ANSI/BOMA office area per square foot of the offers was
calculated using a pre-formulated spreadsheet that required the contracting
officer to enter in numbers from the offerors’ proposals to calculate the final
ANSI/BOMA present value amount.
Supplemental
[4] One offeror notified GSA that it declined to proceed with a Phase II proposal submission because it was not able to secure a site that met the criteria set forth in the Phase II SFO.
[5] Duke protested this award to our Office alleging that offeror A did not have site control. This protest was withdrawn by Duke prior to our Office issuing a decision.
[6] Amendment No. 1 and amendment No. 12 to the SFO were published as the same document. A new solicitation number was assigned to amendment No. 1 for the reopened negotiations. Amendment No. 1 corresponds with the new SFO number, GS-05B-18064; amendment No. 12 corresponds with the original SFO number, GS‑05B-17376.
[7] The three proposed land sites were not reevaluated because the amended SFO restricted offerors from proposing an alternate land site, and each offeror’s previously submitted site was formerly determined to be a “go.”
[8] Initially, the agency and intervenor requested dismissal of Fedcar’s protest arguing, among other things, that the protest was untimely because Fedcar had not diligently pursued information regarding the site proposed by Duke by intervening in Duke’s earlier protest of the first award decision, in which it could have learned the facts on which it now bases its protest--that Duke’s site was not in compliance with the solicitation requirements. However, Fedcar did not have standing to intervene in that protest. In this regard, our Bid Protest Regulations define an “intervenor” as “an awardee if the award has been made.” 4 C.F.R. sect. 21.0(b)(1) (2007). Since the award had been made to Offeror A, Fedcar was not an awardee and, hence, did not have standing in Duke’s initial protest to intervene. In any event, because Duke was not the awardee, Fedcar would have no reason to protest Duke’s compliance with the site requirements. Given that Fedcar’s protest was filed within 10 days of when it was apprised of the award to Duke, there is no basis to find that Fedcar did not diligently pursue the information on which it bases its protest here.
[9] To support its claim, Fedcar has presented various photos and information on the surrounding buildings, topography, and roadways with regard to Duke’s proposed site.
[10] Fedcar contends that the evaluation of its alternate site, which it alleges is similarly situated to, and is only a few blocks away from, Duke’s site, evidences unequal treatment because the Duke site was determined to be acceptable, yet Fedcar’s alternate site was not. However, the evaluation documentation reasonably explains why Fedcar’s alternate site was rejected. Specifically, one evaluator noted, regarding Fedcar’s alternate site, “industrial park setting,” “on busy intersection,” “traffic concerns,” “water concern at south end of site,” “lot appears narrow,” and “heavy truck traffic.” A second evaluator commented, “more of an industrial park, possibly a Class ‘B’ or ‘C’ office park,” “narrow site,” “busy intersection adjacent to propose[d] property,” and “amount of truck traffic.” The consensus evaluation document rates the site as “Does not meet” under criterion number 5, “site not located in industrial areas, near oil tanks, or adjacent to gas stations,” and under criterion number 7, “traffic in/around the site should be limited.” AR, Tab 36(10), Fedcar Alternate Site Evaluation Documents. Thus, we find no evidence of unequal treatment, as asserted by Fedcar, in GSA’s evaluation of these two sites.
[11]
Implicit in the requirement that the agency’s judgment be reasonable
is the requirement that these judgments be documented in sufficient detail to
show they are reasonable. Advanced
Tech. Sys. Inc., B-296493.6,
[12]
In contrast, Fedcar’s rejected site located several blocks from Duke’s site
was, in fact, located within an industrial park. The two site’s respective zoning classifications
support the agency’s evaluation judgments here.
[13] Except for the price evaluation issue and the insufficiently documented source selection decision discussed below, we find Fedcar’s numerous other arguments provide no basis to object to the evaluation and award. For example, Fedcar argues that the agency waived or relaxed the solicitation requirements as to Duke’s proposal by accepting site plan drawings that did not identify access and exit ramps and roads by directional arrows, did not show restaurants or other amenities, and failed to identify structures as required by the solicitation. However, based on our review, the agency reasonably determined that the requested information was ascertainable from elsewhere in Duke’s proposal. (Our review of the record indicates that Fedcar’s proposal had similar minor omissions that did not affect the evaluation.) We find that Fedcar’s arguments that the agency’s discussions with Duke were improperly unequal also had no merit, based on our review of the agency’s transcripts of the discussions, which showed both offerors received meaningful discussions.
[14]
GSA argues that its award notice to Duke
constitutes the acceptance necessary to form a binding contract, and points to
the language of the SFO for support. The
SFO, as amended, states, “The acceptance of the offer and award of the lease by
the Government occurs upon notification of unconditional acceptance of the
offer (i.e. award letter). This
acceptance establishes a binding contract.”
AR, Tab 1L, para. 3.8(D). Here,
however, Fedcar asserts that GSA never unconditionally accepted Duke’s
proposal, but instead unilaterally modified various material terms of the SFO
in making the award, which cannot result in a binding contract.
[15] We also note that contract performance was stayed shortly after the award was purportedly made because of the filing of Fedcar’s protest.