Link: GAO Opinion
Agency: General Services Administration
Disposition: Protest denied in part, dismissed in part.
Keywords: Executive Order Compliance
General Counsel P.C. Highlight: An agency’s compliance with an Executive Order is a matter concerning Executive Branch policy, which GAO does not review.
901 North Fifth Street, LLC (901 North) protests the award of a lease by the General Services Administration (GSA) pursuant to a solicitation for offers (SFO) for office space to house the Environmental Protection Agency (EPA) regional headquarters.
901 North is the owner and current lessor of a building specifically built for and used by the EPA’s regional office. GSA initiated informal discussions with a representative of the then current owner of the building and a representative of their real estate brokerage firm (which remained the same after the change of ownership) to explore the possibility for a 20-year, 10-year firm, fully-serviced succeeding lease. Among the considerations identified by GSA was the lessor’s ability to achieve Leadership in Energy and Environmental Design for Existing Buildings (LEED-EB) Platinum certification, renovation of various areas of the building, replacement of carpeting, interior painting, and upgrading the restrooms. Although negotiations between 901 North, its broker, and GSA continued for an extensive period of time, they were ultimately to no avail. GSA ultimately determined that award of a succeeding lease to 901 North would not be in the best interests of the government, due primarily to the protester’s failure to offer market rental rates. GSA therefore decided to conduct a competitive procurement for this requirement.
The SFO at issue was published to three building owners with buildings. The SFO sought offers for a maximum of 203,475 rentable square feet of office and related space yielding 182,554 usable square feet. The SFO also disclosed that the offered building must, at a minimum, meet the requirements of LEED for Existing Buildings Operations and Maintenance (LEED-EBO&M) Silver level; higher levels of LEED-EBO&M, such as Gold or Platinum, were preferred. The SFO required offerors to submit alternate offers: the first for a 10-year firm term, with two five-year renewal options; the second for a 20-year lease with a 10-year firm term. The agency reserved the right to evaluate each of the two offers and select the term deemed most advantageous to the government. The solicitation advised that award would be made to the firm whose offer was considered most advantageous to the government based on price and the following factors, listed in descending order of importance: (1) sustainability; (2) building and systems design; (3) development team experience; and (4) development team past performance. As relevant here, the sustainability evaluation factor consisted of the following equally-weighted subfactors: (a) LEED-NC [New Construction] or LEED-CS [Core and Shell] Silver, Gold or Platinum certification; (b) LEED-EBO&M gold or platinum certification; and (c) preferred features. With regard to price, the SFO stated that the agency would perform a present value price analysis to determine the annual ANSI/BOMA office area square foot price.
Offers were received from 901 North and another bidder by the closing date. Although, as noted above, the SFO required firms to submit two alternative offers, the protester submitted only one offer for a 10-year firm lease term with two five-year renewal options. The other offeror, on the other hand, submitted offers for a 10-year firm lease term with two five-year renewal options, and for a 20-year lease with a 10-year firm term, as required by the SFO. GSA held multiple rounds of discussions with the offerors during the evaluation. After each round of discussions, the source selection evaluation board (SSEB) evaluated offers, identifying “strengths,” “weaknesses,” and “deficiencies” in each offer. Based on the respective technical scores and prices of each offer, the contracting officer, as source selection authority (SSA), determined that the other offeror’s offer was most advantageous to the government and awarded it the lease for a 10-year firm term with two five-year renewal options.
In its protest, 901 North argues that GSA: (1) improperly and unreasonably calculated move-related costs associated with Lenexa’s offer; (2) failed to conduct meaningful discussions with the protester with regard to the first sustainability subfactor, LEED-NC or LEED-CS Silver, Gold, or Platinum certification requirement, Protester’s Initial Comments at 8-16; and (3) failed to comply with Executive Order 12072. GAO states that its standard in reviewing evaluation challenges is to examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable statutes and regulations. The protester’s mere disagreement with the agency’s judgment does not establish that an evaluation was unreasonable.
901 North complains that GSA incorrectly calculated the awardee’s present value cost (PVC). More specifically, 901 North argues that the awardee’s low PVC price of $21.40 per useable square foot resulted from GSA’s undervaluing significant move related costs associated with relocating to the awardee’s building. In this regard, the SFO provided that an offeror’s PVC would be calculated by adding, “if applicable,” “the cost of relocation of furniture, telecommunications, replication costs, and other move-related costs.” While the protester maintains that the agency will experience other significant costs in excess of the TIA (replication costs) associated with the awardee’s offer, it does not offer any support for, or explain, beyond merely citing the fact of the awardee’s “low” PVC, its conclusion in this regard. Given the lack of evidence in the record to support the protester’s contention that the costs associated with the awardee’s building will exceed the available funds in the TIA, GAO views the protester’s arguments as amounting to unsupported speculation and mere disagreement with the agency’s assessments; thus, GAO has no basis to conclude that the agency’s evaluation was unreasonable or otherwise inconsistent with the terms of the solicitation.
Next, 901 North contends that the discussions it received were misleading regarding the agency’s intended evaluation of the sustainability subfactor A, LEED-NC or LEED-CS certification. According to the protester, during the course of discussions, it advised GSA that it was “impossible” for it “to achieve LEED requirements under Subfactor A” and that it was led to believe that it “would only be rated on the technical factors which it could actually achieve.” The protester asserts that had it known Subfactor 1.A. accounted for 15% of the total possible technical points it could achieve, it “would not have chosen to compete in the Solicitation, as it was impossible for 901 North to obtain any points under Subfactor A.” GAO states that competitive prejudice must be established before it will sustain a protest; where the record does not demonstrate that the protester would have had a reasonable chance of receiving the award but for the agency’s actions, GAO will not sustain a protest, even if deficiencies in the procurement process are found.
Here, the alleged harm suffered by the protester as a result of the allegedly misleading nature of the agency’s discussions does not constitute competitive prejudice. In this regard, as articulated by the protester, the agency’s allegedly misleading discussions merely impacted the protester’s own business decision of whether to continue in the competition. Since this does not bear on the propriety of the ultimate award decision, we have no basis to further consider the protester’s allegations in this regard.
In a supplemental protest filed with GAO, the protester argued that the agency failed to comply with sections 1-102 and 1 203(c) of Executive Order 12072. GAO states that, as an initial matter, GSA’s compliance with the EO is a matter concerning Executive Branch policy, which GAO does not review. In this regard, Executive Order 12072 prescribes policies and directives regarding the planning, acquisition, utilization and management of federal facilities. The underlying policy objective of the Executive Order is to “strengthen the Nation’s cities” and “conserve existing urban resources and encourage the development and redevelopment of cities.” GAO does not review allegations of an agency’s failure to comply with Executive Branch policies under its Procedures, as a general matter. GAO will, however, review an agency’s compliance with, or implementation of, such policies when it is contended that such policies are contrary to applicable procurement statutes and regulations. GAO may also consider compliance with an executive order to the extent the provisions of the order have been expressly incorporated as requirements by the terms of a solicitation.
Here, 901 North’s protest merely challenges GSA’s failure to properly implement the policies established solely by Executive Order 12072, which were not expressly incorporated as requirements in the SFO; thus, the issues raised are not for GAO’s consideration. The protest is denied in part and dismissed in part.