Link: GAO Opinion
Agency: General Services Administration
Disposition: Protest denied.
Keywords: Terms of a Solicitation
General Counsel P.C. Highlight: A contracting agency has the discretion to determine its needs and the best method to accommodate them. In preparing a solicitation, a contracting agency is required to specify its needs in a manner designed to achieve full and open competition and may include restrictive requirements only to the extent they are necessary to satisfy the agency’s legitimate needs.
JBG/Naylor Station, LLC (JBG), protests the terms of a solicitation for offers (SFO), issued by the General Services Administration (GSA), for the lease of office space to house portions of the Department of Homeland Security (DHS).
The procurement was for a total of 1,136,000 rentable square feet of office space, to be apportioned among no more than five buildings, to house three main DHS components. The agency originally posted a request for information (RFI) on the Federal Business Opportunities (FedBizOpps) website seeking market feedback from potential sources concerning GSA’s procurement strategy. The RFI, which did not identify DHS as the lease occupant, intended to “assess the availability of suitable space and to assist the Government in establishing the methodology by which suitable space will be procured.” The requirement was for “existing and/or new construction,” and the estimated occupancy date was the second half of calendar year 2013.
Shortly after the final acquisition plan was approved, the agency posted an expression of interest (EOI) on FedBizOpps to gauge the level of interest from potential sources for essentially the same requirements in the RFI. However, the EOI did identify DHS as the user agency, used the same estimated occupancy date, and stated that the “Government will also consider new construction that…can provide occupancy consistent with the estimated occupancy date.”
The agency issued the SFO, which in relevant part required that offers contain approvals for the offered site so that no other approvals would be required to construct and/or occupy the offered building. The SFO also included the requirement that prior to award of the lease, all offerors were to provide evidence of all building permits necessary to renovate, construct, and/or modify all offered buildings.
Nilson alleges that the SFO improperly limited competition by effectively precluding an offer of new construction. GAO states that a contracting agency has the discretion to determine its needs and the best method to accommodate them. In preparing a solicitation, a contracting agency is required to specify its needs in a manner designed to achieve full and open competition and may include restrictive requirements only to the extent they are necessary to satisfy the agency’s legitimate needs. Where a protester challenges a requirement as unduly restrictive, the agency has the responsibility to establish that the requirement is reasonably necessary to meet its needs. The issue is whether the agency’s explanation is reasonable. Mere disagreement with the agency’s judgment does not show that the judgment is unreasonable. The fact that a requirement may be burdensome or even impossible for one firm to meet does not make it objectionable if the requirement properly reflects the agency’s needs.
For the requirement regarding the estimated occupancy dates, the agency developed a project schedule weighing a number of considerations against DHS’s desire to achieve consolidation of its offices as soon as possible. These considerations included the length of time that a procurement of this size requires, whether there would be sufficient existing space in the market to satisfy the requirement, how long to allow for construction, and the termination date of existing leases. The occupancy dates were driven by current lease expiration dates and what would be least costly in terms of vacancy risk.
Regarding the SFO permit requirements, the agency calculated that site plan approval would take an estimated one-two years for new construction, and the design and completion of construction documents through permit approvals could take that long again. An offeror starting from bare ground could require two to four years to obtain permits and would still need time for construction. Because the total space requirement must be available within about 36 months, the agency considered timely delivery of the space achievable for an offeror proposing new construction, but only if construction began immediately after award. GAO states that the agency reasonably explained the nexus between its need to have new leases in place for timely occupancy and the requirement that offers include site plans and certain permits and that offerors produce permits by a certain date. The requirements were necessary to meet the agency’s needs. The protest is denied.