Link: GAO Opinion
Agency: General Services Administration
Disposition: Protest sustained.
General Counsel P.C. Highlight: An agency may cancel an existing solicitation where it has a reasonable basis for doing so. The potential for cost savings provides a reasonable basis for cancellation.
The General Services Administration (GSA) issued a solicitation for offers (SFO), for the lease of office space to be used by the Environmental Protection Agency (EPA) in San Francisco. JER 370 Third Street, LLC (JER) was one of four offerors that submitted proposals.
The SFO sought proposals for the lease of office and related space for a term of 15 years and included sections defining both “location requirements” and “unique requirements,” and the SFO advised offerors that a failure to meet the latter requirements would render an offer unacceptable. Award was to be made on a best value basis, with technical factors and price considered. Technical factors were considered significantly more important.
The GSA determined that JER had not proposed a building of the “highest quality,” which, in turn, did not comply with the solicitation requirement pertaining to the ceiling cavity, posing a significant risk to the government. Award was made to Lincoln Property Company (Lincoln) based on technical superiority even though its proposal contained a higher price. GSA sent Lincoln a lease, which it refused to sign. Rather than make award to the next in line offeror, GSA decided to cancel the solicitation. It reasoned that the solicitation had not been adequate since comparable quality space was available at significantly lower rates and modification of the SFO’s requirements might increase competition.
JER asserts that although an agency may cancel an existing solicitation where it has a reasonable basis for doing so, GSA did not have a reasonable basis. GSA maintains that JER’s offer was ineligible for award since it failed meet critical solicitation requirements. GAO finds that GSA failed to produce a technical evaluation report endorsed by the evaluation panel members in its response to the protest and thus, the record lacks documentation as to the technical evaluation panel’s conclusions regarding JER’s offer.
GAO additionally finds that GSA’s justification for canceling and resoliciting does not support a finding that offers of space comparable in quality to the Lincoln building at similar rates may be anticipated. GSA did not establish that it will receive prices more favorable than the protester’s if it resolicits. GAO recommends that the GSA reinstate the cancelled solicitation and proceed with the source selection process and reimburse JER reasonable costs of filing and pursuing the protest. The protest is sustained.