BNUMBER: B-275963; B-275963.2; B-275963.3
DATE: April 23, 1997
TITLE: Matter of:Meyers Companies, Inc.
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Matter of:Meyers Companies, Inc.
File: B-275963; B-275963.2; B-275963.3
Date:April 23, 1997
Darcy V. Hennessy, Esq., Moore, Brower, Hennessy & Freeman, P.C., for
the protester.
Christopher M. Crowley, Esq., McDowell, Rice, Smith & Gaar, for Dr.
William P. Schaetzel, an intervenor.
Richard A. Say, Esq., U.S. Army Corps of Engineers, for the agency.
C. Douglas McArthur, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
Lease requirement that lessee erect and maintain fences to separate
parcels, one from another, does not constitute a procurement of
property or services sufficient to establish General Accounting Office
jurisdiction over dispute concerning award of lease, since there is at
best a tenuous connection between the need for fences and the agency's
central mission.
DECISION
Meyers Companies, Inc. protests the award of a lease to Dr. William P.
Schaetzel under notice of availability No. DACW41-97-B-RE-502, issued
by the U. S. Army Corps of Engineers for the lease of land at the
Sunflower Army Ammunition Plant (SAAP) near DeSoto, Kansas. Meyers
contends that the awardee submitted a nonresponsive bid; and that, in
any event, the agency had made an award orally to Meyers at bid
opening, several days before the award to Dr. Schaetzel.
We dismiss the protests for lack of jurisdiction.[1]
On November 6, 1996, the agency issued a notice that it would accept
sealed bids for leases on nine parcels of land at SAAP. In addition
to a cover sheet, the notice consisted of instructions to bidders; a
lease form; land use regulations for SAAP and tract management plans
for each parcel; and a bid form. Paragraph 5 of the instructions
advised bidders to submit two signed copies of the lease form, for
each parcel upon which they desired to bid, as well as a personal
check or money order as a bid guarantee, with the full rental payable
"within ten (10) days after notice of acceptance of the bid."[2]
Paragraph 6b stated that bids were to be submitted in duplicate on the
attached bid form, along with the two signed lease forms and the
required deposit. Paragraph 6f reiterated that no bid would be
considered without the deposit and that the full annual rental would
be due "within ten (10) days after receipt of written notice of
acceptance." Paragraph 11 provided that notice of award would be
given "as soon as practicable to the successful bidder personally, to
a duly authorized representative, or in writing to the bidder at the
address indicated in the bid." The instructions advised bidders that
the agency would award leases to the highest responsive bidders.
The lease form, in pertinent part, provided for payment of a cash
rental to be "offset by the value of work items which shall be
accomplished by the [l]essee for the maintenance, protection, repair,
restoration, and improvement" of the parcels, as described in the SAAP
land use requirements attached to the notice. These land use
requirements governed various lessee activities, including, among
others, provisions relating to fire safety and chemical storage,
limits on the number of animals allowed to graze on the leased parcel,
weed control, and land management. Paragraph 12 identified existing
fence structures and advised bidders that pasture and pasture boundary
fences (as opposed to the plant's security fence) would be the total
responsibility of the lessee.
The tract management plan for agricultural lease number 10 (AL-10),
the parcel at issue in the present protest, required the successful
bidder to remove approximately 3,500 linear feet of fence and replace
it with new five-strand barbed wire fence and maintain fences
throughout the lease period.[3] The plan also advised bidders that
the agency required a letter of credit in the amount of $4,000 to
cover all related costs for replacement and repair of fence in AL-10.
The work was to be completed during the initial year of the lease.
The bid form listed the nine parcels as separate line items. An
asterisk preceded five of the line items, including AL-10. A note at
the end of the schedule warned bidders that line items marked with an
asterisk "contain[ed] exceptional tract management requirements."
These were the requirements spelled out in the tract management plans,
which were summarized at the bottom of the schedule. Specifically,
the schedule noted that AL-10 (as well as AL-9) required extensive
fence work and a letter of credit, as stated in the tract management
plan. Neither the tract management plan nor the bid schedule stated
that bidders were to submit the letter of credit with the bid, and the
notice of availability did not otherwise address the issue.
Two bidders submitted bids on AL-10 on December 17, 1996. Meyers, who
had submitted the lower bid, immediately asserted that the high bid
was nonresponsive because it did not include the letter of credit
required by the tract management plan. The bid opening officer
referred the issue to the contracting officer, who, according to the
different versions of events, either referred the matter to her
counsel or told the bid opening officer to inform Meyers that its bid
was successful. The agency subsequently determined that the
solicitation did not require submission of a letter of credit with the
bid and that the award should go to the high bidder. Consequently, by
letter of January 8, 1997, the agency awarded a lease contract to Dr.
Schaetzel for parcel AL-10, and these protests followed. In addition
to its contention that the high bid was nonresponsive, Meyers asserted
that the agency was improperly attempting to rescind an oral award
made to Meyers at bid opening.[4]
As a general rule, protests concerning offers to sell or lease
government-owned real property are not for consideration under our
Office's bid protest function. Under the Competition in Contracting
Act of 1984 (CICA), 31 U.S.C. sec. 3551 (1994), our Office is authorized
to review protests concerning proposed contracts for the "procurement
of property or services" by a federal agency. Transactions for the
lease of federal land do not generally involve a procurement of
property or services, and therefore are not encompassed by our CICA
bid protest authority. Equity Fed. Sav. Bank, 64 Comp. Gen. 697
(1985), 85-2 CPD para. 81 at 1. Although there may be procurement aspects
to a lease because it imposes certain obligations on the lessee, that
does not necessarily mean that we have jurisdiction over the matter.
Trimmer Marina, B-223107, June 23, 1986, 86-1 CPD para. 578 at 1. In this
regard, we have declined jurisdiction where the imposition of
obligations upon a lessee were collateral to the primary purpose of
the transaction--the lease of government property. See North Florida
Shipyards, Inc., B-243575, May 3, 1991, 91-1 CPD para. 434.
In the somewhat related area of concessions, our Office has found the
award of concession contracts to be subject to our bid protest
jurisdiction where they result in a benefit to the government. Such
benefit to the government is measured by whether the transaction in
question relates to the advancement of the agency's mission, an issue
that relates, in turn, to whether the agency's work load will be
reduced or whether the effort is somehow rendered, either directly or
indirectly, in support of the agency's mission requirements. Maritime
Global Bank Group, B-272552, Aug. 13, 1996, 96-2 CPD para. 62 at 2. See
also West Coast Copy, Inc.; Pacific Photocopy and Research Servs.,
B-254044; B-254044.2, Nov. 16, 1993, 93-2 CPD para. 283 at 5 (jurisdiction
over award of photocopy concession serving the agency's mission
requirement of furnishing copies of documents to the public); Gino
Morena Enters., 66 Comp. Gen. 231, 234-235 (1987), 87-1 CPD para. 121 at
4-5, aff'd, B-224235.2, May 13, 1987, 87-1 CPD para. 501 at 1
(jurisdiction over award of haircut concession at Air Force basic
training center, where initial haircuts were an aspect of the training
experience integral to the agency's mission). Where any benefit to
the government is speculative or contingent, jurisdiction is lacking,
even though earmarks of a procurement are present. Maritime Global
Bank Group, supra (no jurisdiction over Navy's execution of an
agreement with a bank for the provision of on-base banking services).
The protester here has identified no aspect to the lease of benefit to
the government or the agency's mission. The protester simply contends
that there are procurement aspects to the lease in that the agency is
procuring fencing to separate parcels (and herds) one from another.
The protester suggests that, in a sense, the agency is paying for the
fence because lessees receive a credit against rent for the fence
work. The agency would not be paying for fences, Meyers argues,
unless it anticipated a benefit from them. The agency, on the other
hand, maintains that the fences serve no purpose of the agency's and
are solely for the benefit of the lessees.
We are not persuaded, absent evidence of a direct or indirect
relationship to the agency's mission, that allowing a credit for the
fence work necessarily makes such work for the benefit of the
government. While the fencing may allow the agency to manage the
leased parcels more efficiently and ensure that a lessee's cattle do
not stray onto another lessee's parcel, there is no evidence that this
is work the government would otherwise be obliged to provide, and we
see no more than a tenuous connection between the repair work on the
fences and the Army's central mission here, which is to maintain
production facilities.[5] The protester has simply failed to
demonstrate the existence of any palpable benefit to the government
from the lease agreement. Accordingly, based on the record here, we
view the fencing requirement as collateral to the purpose of the lease
and therefore cannot conclude that the lease transaction is within the
bid protest jurisdiction of our Office.
The protests are dismissed.[6]
Comptroller General
of the United States
1. Meyers withdrew its second protest, which concerned the agency's
failure to stay performance during the pendency of that protest, after
learning that the agency had, in fact, decided to stay performance
until our Office issued its decision.
2. Paragraph 5f provided for submission of a check in the amount of
the first years' rent, in the full amount up to $1,000, and a deposit
equal to 10 percent of that amount.
3. The notice also included maps of the parcels, indicating those
portions of fence for which each lessor was responsible, as well as
minimum standards for fences.
4. In subsequent protests, Meyers asserted that the award was improper
because the awardee did not receive a written notice of award within
the 10-day acceptance period for which the solicitation provided; and
that acceptance of Dr. Schaetzel's letter of credit as evidence of
responsibility constituted bad faith. We note that our Office has
consistently held that a formal written extension of a bid acceptance
period is not necessary where the agency can infer the bidder's intent
to extend from its actions. Action Serv. Corp., B-254861, Jan. 24,
1994, 94-1 CPD para. 33 at 4. Further, although an allegation of bad
faith provides a basis for our Office to review the agency's
affirmative determination of responsibility, which we normally do not
do, the protester is required to produce convincing evidence that
government officials had a specific and malicious intent to injure the
protester. Sanstrans, Inc., B-245701, Jan. 27, 1992, 92-1 CPD para. 112
at 5. There is no such evidence here.
5. The land use regulations define the agency's mission as follows:
" . . . to maintain all facilities required for the
production of ammunition propellants and chemicals for
department of army and meet all goals of environmental
compliance and remediation."
6. We point out that, in any event, the principal protest contentions
appear to be without merit. As indicated above, paragraphs 5, 6b and
6f of the solicitation instructions all list what bidders had to
submit, including the required deposit, but nowhere do the
instructions mention the letter of credit required by the tract
management plan. The agency thus reasonably views the letter of
credit as a performance requirement. With regard to the second issue,
relating to the oral award, while Meyers contends that paragraph 11 of
the instructions, quoted above, implies that the agency will make
award orally, paragraph 6f specifically provides for written notice of
award, without which the lessee is not obligated to pay rent.