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.