BNUMBER:  B-274081.4
DATE:  February 24, 1997
TITLE:  The Real Estate Center

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Matter of:The Real Estate Center

File:     B-274081.4

Date:February 24, 1997

Lynn Hawkins Patton, Esq., Ott & Purdy, for the protester.
Jane Converse, Esq., Department of Veterans Affairs, for the agency.
Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protester that received a copy of an invitation to submit an 
application to become an approved real estate management broker is not 
an interested party to object on behalf of other firms that were not 
solicited.

2.  Agency predetermination of fees to be paid to real estate 
management brokers without conducting a price competition is 
unobjectionable where statutory requirement that price be considered 
in all selection decisions does not apply to the agency's solicitation 
of brokers at issue.

3.  Agency's failure to timely respond to protester's requests for 
clarifications concerning broker assignment process does not provide a 
basis for sustaining a protest where letter soliciting broker 
applications indicated basically what performance would be required, 
the contents of the application form revealed the factors that the 
agency would consider in the approval process, and the protester did 
not indicate that it would have completed the application in a 
different manner had it received the requested information earlier.

DECISION

The Real Estate Center (REC) protests the issuance of a letter on 
November 7, 1996, by the Department of Veterans Affairs (VA) inviting 
certain firms to submit applications (VA Form 26-6685) for designation 
as approved real estate management brokers to manage assigned VA 
properties in the San Diego, California area.  Earlier in the year, 
the VA had issued solicitation No. 691-81-95 for property management 
services and had awarded a contract to O'Malley & Principi; in 
response to a protest filed by REC, the agency decided to terminate 
that contract and, following revisions to the solicitation, to 
resolicit for its requirements.  Pending the resolicitation effort, 
the November 7 letter, which was issued to all firms that responded to 
the original solicitation, sought to obtain interim property 
management coverage on a preestablished fixed-fee basis.  REC 
complains that competition was improperly restricted:  (1) by virtue 
of the limited distribution of the letter; (2) by the establishment of 
the fees to be paid by VA without price competition; and (3) because 
the agency did not respond to a series of clarification requests from 
REC prior to the submission of its application.[1]

We deny the protest.

At the outset, we note that much, if not all, of REC's protest is cast 
in terms of alleged VA violations of procurement statutes and 
regulations, most notably the Competition In Contracting Act of 1984, 
as amended (CICA), and the Federal Acquisition Regulation (FAR).  
However, the referenced statute and regulation do not apply to the 
approved management broker program at issue.  As the VA application 
form No. 26-6685 indicates, the designation of VA management brokers 
is authorized by 38 U.S.C.  sec.  3720(a)(6) (1994), which broadly empowers 
the Secretary of Veterans Affairs to administer property acquired or 
held by VA; subsection 3720(b) provides:

     "The powers granted by this section may be exercised by the 
     Secretary without regard to any other provision of law not 
     enacted expressly in limitation of this section, which would 
     otherwise govern the expenditure of public funds; however, 
     section 3709 of the Revised Statutes (41 U.S.C.  5) [requiring 
     advertising of requirements for a sufficient time before 
     receiving proposals] shall apply to any contract for services or 
     supplies on account of any property acquired pursuant to this 
     section if the amount of such contract exceeds . . . [$25,000]."

Since the record indicates, and the protester does not dispute, that 
the $25,000 threshold is extremely unlikely to be met in light of the 
fee schedule prescribed by VA for managing properties, even the 
advertising requirements of 41 U.S.C.  sec.  5 (1994) do not apply to the 
program in dispute.  In cases where the basic procurement statutes are 
not applicable to a protested "procurement," we review the actions 
taken by the agency to determine whether they were reasonable.  
Kennedy & Assocs. Art Conservation, 68 Comp. Gen. 261 (1989), 89-1 CPD  para.  
186. 

First, REC protests that the VA improperly limited the distribution of 
the November 7 letter to only those firms participating in the 
earlier, unsuccessful procurement.  It is clear, however, that REC was 
unaffected by the limited distribution because it received a copy of 
the letter and responded to it.  In order for a protest to be 
considered by our Office, a protester must be an "interested party," 
which means it must have a direct economic interest in the resolution 
of a protest issue.  Bid Protest Regulations, section 21.0(a), 61 Fed. 
Reg. 39039, 39042 (1996) (to be codified at 4 C.F.R.  sec.  21.0(a)).  This 
protest basis is essentially on behalf of other potential applicants 
that were not solicited.  REC lacks the requisite interest to advance 
the issue in this case.  Galaxy Custodial Servs., Inc. et al., 64 
Comp. Gen. 593 (1985), 85-1 CPD  para.  658.  In any event, REC has not 
indicated how it was prejudiced by VA's failure to solicit other 
firms.  Id.

Next, REC objects to the fact that the VA has established the fee 
schedule it will pay approved brokers and has not permitted price 
competition to possibly obtain  lower  prices.  While it is true that 
CICA requires agencies to consider cost or price in all selection 
decisions, 41 U.S.C.  sec.  253b(d); Sturm, Ruger & Co., Inc., B-250193, 
Jan. 14, 1993, 93-1 CPD  para.  42, as explained above, CICA does not 
specifically apply to the actions inviting broker applications taken 
by VA in this case.  Moreover, the method of establishing fees, as set 
forth in Chapter 5 of the VA Property Manual, appears reasonable 
insofar as it takes into account prevailing community rates and 
current market surveys.  Accordingly, VA's use of the fee schedule 
does not provide a basis for sustaining the protest.

Further, REC objects to the agency's failure to respond to 17 
questions concerning the November 7 letter posited by the protester in 
a letter to VA dated November 12.  As the protester states, "[t]he 
primary focus of the questions was to obtain information concerning 
the procedures by which VA properties would be assigned."  It is 
apparent from the context of the questions that REC was principally 
interested in obtaining additional information concerning the duties 
of the management brokers once approved and the criteria to be used in 
their approval.  

The November 7 letter and the accompanying broker applications 
reasonably convey enough information for a prospective applicant to 
understand what successful performance would entail and what factors 
would be used to determine the acceptability of an application.  For 
example, the letter specifically delineated the four services for 
which brokers will be compensated:  (1) the preparation of an initial 
property inspection report; (2) regular monthly inspections; (3) 
supervision of repairs; and (4) supervision of maintenance services.  
Nothing in the record indicates that other duties will be required of 
a successful applicant.

Likewise, the text of the application reveals the criteria that the VA 
considers in deciding whether or not to approve a broker application.  
The application sought specific information concerning the length, 
nature and location of property management experience, client 
references and resources available to perform management duties and it 
advised applicants that a credit check would be performed.  These 
categories of information parallel those portions of Chapter 5 of the 
VA Property Manual, which outlines the factors to be considered by the 
VA in evaluating an application.

Finally, while the agency did not respond to REC prior to the time it 
submitted its application, the answers to the protester's questions 
were appended to the agency report in this matter and REC, having had 
an opportunity to comment on them. makes no argument that it would 
have completed the application any differently had it received the 
responses prior to responding to the November 7 letter.  Thus, we have 
no basis to conclude that the format of the invitation package was 
deficient.

The protest is denied.

Comptroller General
of the United States

1. On February 7, 1997, REC filed a protest challenging the approval 
of three broker applications submitted in response to the November 7 
letter from VA and the rejection of its own application; that protest 
was supplemented on February 18.  The allegations contained in these 
filings will be separately considered under file Nos. B-274081.5 and 
B-274081.6.