BNUMBER: B-270894.2; B-270894.3
DATE: August 15, 1996
TITLE: First Street Investments Limited Partnership
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Matter of:First Street Investments Limited Partnership
File: B-270894.2; B-270894.3
Date:August 15, 1996
Alex D. Tomaszczuk, Esq., and Devon E. Hewitt, Esq., Shaw Pittman
Potts & Trowbridge, for the protester.
Barry D. Segal, Esq., and Allan I. Aasmaa, Esq., General Services
Administration, for the agency.
Christina Sklarew, Esq., John Van Schaik, Esq., and Michael R. Golden,
Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
Protest against award to higher-priced, higher technically rated
offeror is denied where the solicitation evaluation scheme gave
greater weight to technical merit than price, and the agency
reasonably concluded that protester's lower price did not outweigh the
technical advantages demonstrated in the awardee's higher-priced
proposal.
DECISION
First Street Investments Limited Partnership protests the award of a
contract to Arizona Public Service (Arizona) by the General Services
Administration (GSA) under solicitation for offers (SFO) No.
GS-09B-96089 for a lease of office and related space for the Bureau of
Indian Affairs and the Bureau of Reclamation in the Phoenix, Arizona
area. First Street alleges improprieties in the evaluation of
competing offers and the award decision.
We deny the protest.
The SFO sought offers for a 10-year term, with 5 years firm, for
approximately 60,546 rentable square feet yielding between a minimum
of 54,492 to a maximum of 57,216 occupiable square feet.[1] The SFO
required the space to be located "in a first class quality building of
sound and substantial construction" and to have a potential for
efficient layout. It further specified that the space offered "should
be located in a new or modern office building with facade of stone,
marble, brick, stainless steel, aluminum or other permanent materials
in good condition acceptable to the contracting officer . . . .
Overall, the building should project a professional and aesthetically
pleasing appearance including an attractive front and entrance way."
Further, the SFO required that if the offered space was not in a new
or modern office building, it should be in a building that by
occupancy had undergone first class restoration or adaptive reuse for
office space with modern conveniences. If the restoration work was
underway or proposed, the offeror was required to submit with its
offer architectural plans acceptable to the contracting officer. The
SFO listed a number of architectural requirements, such as a
requirement for windows in each exterior bay, which could be waived by
the contracting officer.
The SFO provided that the lease contract would be awarded to the
offeror whose proposal was determined to be most advantageous to the
government, based on price and other factors in the solicitation. The
SFO listed the following four evaluation factors and stated that these
factors combined were significantly more important than price:
building configuration, efficient layout, public parking; and building
security.
Three firms, including First Street and Arizona, submitted initial
offers. First Street offered space currently leased by GSA for the
Bureau of Indian Affairs. On December 11 and 12, the agency conducted
negotiations. On December 12, the contracting officer issued letters
requesting the submission of best and final offers (BAFOs) by December
22 and transmitted an amendment. First Street states that the
December 12 mailing it received contained only the amendment and the
second page of the letter, which did not include the BAFO request.
First Street states that it informed the agency on December 13 that it
had not received a complete package and on December 19 it sent the
agency a fax providing pricing information that had been requested
during negotiations. Only Arizona submitted its BAFO by the December
22 BAFO deadline. On January 2, First Street contacted the
contracting officer to ask when BAFOs would be requested and was told
about the contents of the December 12 letter, which was then faxed to
First Street. On January 4, First Street again contacted the agency,
and it was agreed that the protester would be permitted to submit its
BAFO by January 5. The protester submitted a BAFO in accordance with
these instructions, without revising the technical portion of its
offer. First Street's price revision was considered in the final
evaluation. Arizona was selected for award based on its
higher-priced, higher technically rated proposal.
First Street primarily challenges the evaluation of the technical
proposals and the decision to select Arizona for award. Generally,
the evaluation of technical proposals is a matter within the
contracting agency's discretion since the agency is responsible for
defining its needs and the best method of accommodating them. Science
Sys. and Applications, Inc., B-240311; B-240311.2, Nov. 9, 1990, 90-2
CPD para. 381. In reviewing an agency's technical evaluation, we will not
reevaluate the proposals, but will examine the record of the
evaluation to ensure that it was reasonable and in accord with stated
evaluation criteria, and not in violation of procurement laws and
regulations. Information Sys. & Networks Corp., 69 Comp. Gen. 284
(1990), 90-1 CPD para. 203.
First Street alleges that the evaluation was improper because every
member of the source selection panel did not evaluate every part of
each proposal, and because the source selection authority did not
score proposals. The protester points out that the source selection
plan (SSP) identifies the source selection authority as a member of
the evaluation team, and concludes that the source selection authority
therefore was required to evaluate and score each proposal for
technical merit. Similarly, the protester concludes that because the
SSP does not specifically provide that the evaluators are not
responsible for scoring each evaluation factor, the SSP must require
the source selection authority and other members to score each
evaluation factor.
We disagree. We find no such requirements in the SSP and know of no
basis to object to the agency's approach here, pursuant to which
evaluation team members with differing skills or training scored those
areas of the proposals related to their areas of expertise. In
addition, even if the SSP did require the approach that First Street
suggests, SSPs are merely internal agency instructions which do not
vest outside parties with rights; agencies are only required to adhere
to the evaluation scheme outlined in the solicitation. Antenna Prods.
Corp., 69 Comp. Gen. 182 (1990), 90-1 CPD para. 82.
Moreover, the record supports the conclusion that Arizona's proposal,
and the space it offered, were superior to First Street's proposal and
the space it offered. First Street's proposal earned its lowest
scores under the first two evaluation factors listed in the SFO.
Under the first factor, building configuration, the SFO stated that
the highest scores would be awarded for the following:
"(a) Square or rectangular buildings with a center core
configuration to allow for large open space layout of systems
furniture and minimize required exiting.
"(b) Buildings with required fire exiting that allows the maximum
open areas with minimum structural intrusions into the space.
"(c) Buildings with 18,000 available occupiable square feet or
greater per floor.
"(d) Contiguous space."
In the evaluation, proposals could be given a maximum of 60 points for
this factor; First Street's proposal received 42 points, and Arizona's
received 55 points.
Under the second factor, efficient layout, the SFO provided that the
highest scores would be awarded as follows:
"(a) Buildings with wide and regular column space (29' on center
or greater) to allow for a systems furniture layout with minimum
in wasted floor space.
"(b) Buildings with center core to window wall dimensions of 50'
or greater.
"(c) Buildings without narrow or irregular space configurations,
intrusions into the open space or other unusual building
features.
"(d) Optimum layout based on the test fit provided by offeror."
Proposals could receive a maximum of 40 points for this factor; First
Street's proposal received 27, and Arizona's received 34.
First Street offered space on four separate floors with approximately
15,000 square feet available on each floor. Each of the floors
includes an area under all of the windows on the exterior walls that
is unusable floor space but is considered "occupiable square footage"
as measured by GSA's standards and therefore is included in the
calculation of the lease price. One side of the building has no
windows, and another side provides no access to windows because the
elevators and restrooms are all located along that wall. The
evaluation record describes the building configuration offered by
First Street as "limiting, given the exiting, but not entirely
unworkable." It identifies as a problem irregular columns with narrow
spaces left for workstations, noting that in some areas the columns
would be in the middle of workstations. The test fit revealed
inefficiencies and inflexible areas. For example, the protester's
building did not offer the type of center core configuration
appropriate to a large open space layout; did not offer minimal
structural intrusions into the space; and did not offer at least
18,000 square feet per floor. Also, the protester did not offer space
with the potential for an efficient layout with widely spaced columns
or otherwise unobstructed areas.
On the other hand, the evaluators found that the building in which
Arizona proposed space has windows on all sides, nine foot ceilings
throughout, and no columns and few other obstructions hindering the
layout of the space. The space offered is on two and one-half floors
and the agency explains that it is most efficient to locate an agency
on as few floors as possible. The evaluators found no meaningful
deficiencies in the space offered by Arizona and First Street has not
challenged the evaluation of Arizona's proposal. Thus, on this record
we have no basis to disagree with the conclusion that Arizona's
proposal was technically superior to the protester's.
First Street also argues that the technical evaluation was flawed
because the agency considered the "class" or aesthetic appeal of the
buildings being offered, which the protester characterizes as the
improper application of an unstated evaluation criterion. As evidence
of the improper consideration of the "class" of the buildings, First
Street notes that the SSP used by the evaluators provided for the
assignment of additional "price" points to proposals based on whether
the offered buildings were class "A," "B," or "C." In addition, the
protester states that during a negotiation session an agency official
noted that the firm's offered building was a class "C" building and
after award the contracting officer commented on the "class" of
Arizona's building.
We find no merit to this allegation. As discussed above, the record
shows that First Street's technical score was justified by
considerations related to the building configuration and layout
potential--in other words, considerations consistent with the
evaluation scheme established in the SFO. In addition, the agency
reports that the provisions of the SSP concerning building class were
not implemented in the evaluation. Also, there is no evidence that
building class was considered in the scoring of the proposals.[2] In
any event, we point out that the SFO included certain minimum
requirements in the statement of work--concerning overall appearance
and quality of the building exterior--that GSA was required to take
into consideration in order to determine whether offered space met its
minimum needs. The record shows that in order to meet the
requirements of the SFO, the building First Street offered would need
extensive renovations or repairs, including the installation of new
windows, replacing the heating, ventilation and air conditioning
system, and overhauling the plumbing system. The protester's proposal
included no plans for such work, as required by the SFO. Although
First Street's proposal was kept in the competitive range, it appears
from the record that First Street's building did not meet certain
requirements.[3]
First Street also argues that the award decision was flawed because
price was not given sufficient weight. In selecting an awardee,
price/technical tradeoffs may be made subject only to the test of
rationality and consistency with the established evaluation factors.
Maytag Aircraft Corp., B-237068.3, Apr. 26, 1990, 90-1 CPD para. 430. An
award to an offeror with a higher technically scored proposal and a
higher price is unobjectionable, so long as the result is consistent
with the evaluation criteria and the agency has determined that the
technical difference is sufficiently significant to outweigh the price
difference. Calspan Corp., B-258441, Jan. 19, 1995, 95-1 CPD para. 28.
Even where a source selection official did not specifically discuss
the price/technical tradeoff, we will not object to the tradeoff if it
is clearly supported by the record. Maytag Aircraft Corp., supra.
The record here reasonably supports the agency's price/technical
tradeoff. First Street's proposal received a technical score of 99
points and offered a price of $12.95 per square foot. Arizona's
technical score was 119 points, and its price was $18.40. Moreover,
beyond the scores assigned to the proposals and the prices offered,
the agency reports that leasing First Street's building would
potentially have an impact on the operations efficiency of the tenant
agencies and could be expected to result in difficult-to-estimate
future costs resulting from the inflexible layout of the space. The
agency concluded, for example, that the irregular and narrow column
spacing would require system furniture to be reconfigured and
workstations to be specially designed or customized to accommodate the
structural intrusions in the space. Because the protester's building
presents difficulties for space planning for system furniture, the
agency calculates that its minimal square footage requirement would be
higher for this type of inflexible layout than it would be in a
building with large open spaces, such as the one offered by Arizona.
In addition, because First Street's building has a smaller area
available on each floor, the agency would not be able to locate its
tenants' larger divisions on single floors; space requirements for
certain equipment, such as copy machines, storage and file rooms,
would have to be provided on each floor, increasing the total space
required. Thus, in making its price/technical tradeoff, the agency
explains that it did not simply compare prices and technical scores,
but took potential hidden costs into account. Having considered the
technical scores assigned to the two proposals and the advantages and
disadvantages of the space offered by the two firms, the agency
explains that it considered the superiority of Arizona's proposal to
be worth the additional cost of awarding to that firm. We have no
basis to question that determination.[4]
First Street also alleges that GSA prevented First Street from
competing under this procurement on a full and fair basis. The
protester bases this allegation on a number of events which it
believes show a pattern of behavior intended to exclude First Street
from the competition. In this respect, First Street alleges that it
was misled about the time frame concerning the request for (and
submission deadline for) BAFOs, and that the agency unfairly required
the firm to submit its BAFO in 24 hours after First Street sought
information concerning the deadline. The agency's account of the
events alleged by First Street differs; the agency alleges, for
example, that the protester offered to submit its BAFO within 24
hours. We need not resolve this conflict. The simple fact remains
that First Street was not prevented from competing for the award; its
BAFO was fully considered.[5]
Finally, First Street alleges that the agency improperly engaged in
post-BAFO discussions with Arizona. First Street alleges that since
the requirement for rentable square feet listed in the lease contract
(60,246 square feet) was lower than the amount listed in Arizona's
BAFO (63,126), the agency must have held discussions with Arizona to
effect this change. The protester also speculates that the decrease
in rentable square footage would result in a reduction in the
occupiable square footage below the minimum required by the SFO and
argues its own offer might have received a higher technical score if
it had been evaluated under the "changed" requirement.
In response, the agency states that it held no post-BAFO discussions.
Subsequent to the submission of BAFOs, the Bureau of Indian Affairs
reduced its request for space, based on a reduction in its needs.
However, because the new space requirement did not differ
significantly from the requirement specified in the SFO, the
contracting officer did not amend the solicitation but simply
presented Arizona with a lease contract for 60,246 square feet, which
Arizona accepted.
While generally the government must issue a written amendment to
notify all offerors of changed requirements in order to afford them an
opportunity to respond to the revised requirements, see Diversified
Computer Consultants, B-230313; B-230313.2, July 5, 1988, 88-2 CPD para.
5, we will only sustain a protest of the agency's failure to issue a
written amendment notifying offerors of a change in requirements where
this change affected the selection decision or was otherwise
prejudicial to the protester. FKW Inc. Sys.; ColeJon Mechanical
Corp., B-235989; B-235989.2,
Oct. 23, 1989, 89-2 CPD para. 370. Here, the SFO described the required
space as approximately 60,546 rentable square feet, yielding between
54,492 and 57,216 occupiable square feet. The lease contract shows
60,246 rentable square feet--which is consistent with the
"approximately 60,546" square feet required by the SFO--and in fact
provided 55,116 occupiable square feet. This occupiable square
footage is within the range specified in the SFO. In these
circumstances, we fail to see how the modification constituted a
"change" that required amending the solicitation, and we find no
support for the suggestion that the protester was prejudiced by this
modification.
The protest is denied.
Comptroller General
of the United States
1. The SFO explained that "rentable space" is the area for which a
tenant is charged rent, and may include a share of the building's
common areas, such as lobbies and corridors, etc., while "occupiable
space" includes only the portion of rentable space that is available
for the tenant's personnel, equipment, and furnishings.
2. The record shows that, notwithstanding the SSP, prices were not
scored so there was no opportunity to add "price" points based on
building class.
3. The record shows that during a recent inspection by GSA, First
Street's building was found to be in "sub-standard condition," and
generally was considered to present an "unacceptable working
environment" requiring a renovation of the space. Further detail also
is provided showing reports of ceiling tiles that are broken, stained
or missing; carpet that was badly worn, stained and visibly dirty;
stained or dirty walls; tile floors that were dirty; restroom fixtures
in poor and unsightly condition; unacceptable electrical and
communication distribution systems, in addition to the building's
failure to meet the SFO's requirement for windows in all of the office
bays.
4. First Street argues that the selection decision was flawed because,
consistent with the solicitation, the comparison of its price and
Arizona's price should have been based on the entire 10-year potential
term of the lease, rather than on the 5-year firm period. While the
protester is correct that the SFO called for the evaluation and
selection to be based on consideration of the full 10-year potential
lease term, First Street's argument ignores the fact that neither
firm's unit price varied over the 10-year term and thus the price
delta would be the same percentage no matter how long the term of the
lease.
5. First Street does not argue that it would have offered a different
space or would otherwise have revised the aspects of its offer that
earned its low technical score if it had been given additional time to
prepare its BAFO.