BNUMBER: B-277375; B-277375.2
DATE: October 8, 1997
TITLE: Mecca Investments, L.L.C., B-277375; B-277375.2, October 8,
1997
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Matter of:Mecca Investments, L.L.C.
File: B-277375; B-277375.2
Date:October 8, 1997
Lawrence P. Block, Esq., Doyle & Bachman, for the protester.
Joel D. Malkin, Esq., General Services Administration, for the agency.
Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that evaluation of offers and agency's subsequent award of a
lease for office space were improper because awardee's offer failed to
meet material requirements of the solicitation is denied where
awardee's offer reasonably was found acceptable and record shows that,
even if agency did relax minimum space requirement for awardee, as
protester contends, protester was not competitively prejudiced by
agency's actions.
DECISION
Mecca Investments, L.L.C. protests the award of a lease by the General
Services Administration (GSA) to ARC Construction under solicitation
for offers (SFO) No. GS-05B-16162 for space for Social Security
Administration (SSA) offices in Evansville, Indiana. Mecca contends
that ARC's offer should have been rejected for failure to comply with
material requirements of the SFO regarding public transportation,
location/amenities, and minimum occupiable space.
We deny the protest.
The agency evaluated the acceptability of potential sites in the
Evansville area for the SSA office space and issued the SFO to
prospective offerors whose sites were deemed acceptable. The factors
for consideration in assessing a site's acceptability were set out in
the SFO, which provided, among other things, that "[a]dequate public
transportation is required to the proposed location." The following
property location requirements (for properties located outside of the
city center area) were also set out in the SFO:
Space must be located in an office, research, technology, or
business park that is modern in design with a campus-like
atmosphere, or on an attractively landscaped site containing one
or more modern office buildings that are professional and
prestigious in appearance with surrounding development
well-maintained and in consonance with a professional image. . .
. Adequate eating facilities are to be located within 2 city
blocks and other employee services, such as retail shops,
cleaners, banks, etc. should be located within 2 city blocks.
The SFO advised offerors that GSA was interested in leasing
approximately 10,929 square feet of net rentable space and that the
rentable space "must yield a minimum of 9,935 occupiable square feet
to a maximum of 10,432 occupiable square feet." The SFO defined
"rentable space" as "the area for which a tenant is charged rent" and
listed those areas within a proposed building that may or may not be
included in the calculation of rentable space. "Occupiable space" was
defined in the SFO as:
that portion of rentable space that is available for a tenant's
personnel, equipment and furnishings and is the method of
measurement for the area for which the Government will evaluate
offers. Net usable [space] and [occupiable space], for purposes
of this solicitation, are identical.
The SFO provided that for space on a single tenancy floor, occupiable
space was to be determined by computing "the inside gross area by
measuring between the inside finish of the permanent exterior building
walls," and then deducting, among others, the following areas and
their enclosing walls from the gross area: equipment/service areas;
corridors in place or required for access or safety; vestibules; and
visitor rest rooms. For price evaluation purposes, the SFO provided:
Offerors are required to submit plans and any other information
to demonstrate that the rentable space yields occupiable space
within the required occupiable range. The Government will verify
the amount of occupiable square footage and convert the rentable
prices offered to occupiable prices, which will subsequently be
used in the price evaluation.
The SFO provided that an award of the 10-year lease would be made to
the responsible offeror whose proposal conformed to the requirements
of the SFO and offered the lowest price.
Mecca's and ARC's offers were among those submitted in response to the
SFO and each proposed to construct a new building on its offered site.
Mecca, on its best and final offer's (BAFO) GSA Form 1364 (entitled
"proposal to lease space"), offered 10,432 square feet of "net usable"
(i.e., occupiable) space at a square foot rate per year of $24.34, for
a total amount of $253,914.88. ARC, on its BAFO's GSA Form 1364,
proposed 10,418 square feet of net usable space at a square foot rate
per year of $23.50, for a total amount of $244,823. Having found both
offerors' proposed sites and facilities acceptable, the agency awarded
a lease to ARC on June 18, 1997, on the basis of that firm's lower
proposed price. This protest followed.
Mecca initially protests the evaluation of the awardee's proposed
site. Mecca contends that the site proposed by the awardee, ARC, does
not comply with the transportation and location requirements of the
SFO and thus should not have been considered for award. The
evaluation of offers is primarily within the discretion of the
contracting agency, and our Office will review the evaluation to
ensure that it was reasonable and consistent with the stated
evaluation factors. Buffalo Central Terminal, Ltd., B-241210, Jan.
29, 1991, 91-1 CPD para. 82 at 5. Here, the record provides no basis to
question the agency's determination of the acceptability of the
awardee's proposed site.
The protester first contends that since the bus stop that GSA
considers to provide "adequate public transportation" to ARC's site is
difficult to locate, is two blocks away from the awardee's site, is on
a block without sidewalks, and requires passengers visiting the SSA
offices at ARC's site to cross a street with heavy vehicular traffic,
the offer did not meet the SFO requirement for "adequate public
transportation." The agency points out that the SFO did not define
the phrase "adequate public transportation," and that all proposed
sites were to be evaluated only on a pass/fail basis for compliance
with this transportation requirement. GSA reports that the bus stop
(marked with an appropriate sign) is on the city's bus route and that
vehicular traffic on that street during SSA office hours (which are
not heavy traffic commuter hours) is reasonable.
Our review of the record supports the reasonableness of the agency's
evaluation of ARC's offer and the determination that "adequate public
transportation" was provided. The SFO describes the transportation
requirement in broad terms only--"adequate public
transportation"--without specifying any particular features. Thus, to
take one example of the features Mecca points to as lacking from ARC's
site--sidewalks--while a sidewalk at the bus stop may be beneficial,
it was not required. Given the SFO's generally worded pass/fail
transportation requirement, and since it is undisputed that the city
bus transportation system services the area of the proposed site, we
see no basis to question the agency's determination that ARC's offer
was acceptable in this regard.
The protester next alleges that ARC's proposed site does not meet the
location and eating facilities requirements of the SFO since the
neighboring area is not attractive or professional in appearance and
since the one eating facility (a Chinese restaurant) in the required
two-block range of the site cannot satisfy the SFO's requirement for
more than one such facility (since the SFO requires "adequate eating
facilities"). In its report responding to the protest, the agency
submitted photographs of the ARC site surroundings (as well as of
Mecca's proposed site). Our review of the record confirms the
reasonableness of the agency's determination that the location
requirements were met by the ARC offer. As the agency reports, the
photographs show that there are attractive, professional-looking
buildings within the vicinity of the ARC site which reasonably meet
the stated location requirement. Further, the record shows that a
neighboring grocery store has a delicatessen. We believe the
delicatessen could reasonably be considered (in addition to the
referenced restaurant) in the evaluation of eating facilities since
food availability is the crux of the generally worded SFO requirement,
rather than eating accommodations with seating, as the protester
suggests.[1] The record thus does not support Mecca's contentions
that the agency's evaluation and acceptance of the ARC site's location
were unreasonable or inconsistent with the SFO requirements.
Mecca next protests the acceptance of ARC's offer of occupiable space,
contending that: forms and drawings submitted with the offer were
ambiguous regarding rentable versus occupiable space proposed; the
contracting officer improperly failed to verify that a drawing
submitted with the ARC offer supported the awardee's statement of its
proposed amount of occupiable space; and since ARC's preliminary
drawing shows that ARC did not offer the requisite minimum occupiable
space, the offer must be rejected for failure to comply with a
material requirement.
The SFO included two forms to be completed by offerors--GSA Form 1217,
which requires each offeror to report the amount of "rentable space"
in the entire building and the "rentable space" to be leased by the
government, as well as the lessor's costs associated with those
building space amounts (to be considered by the agency for comparative
purposes where a multiple-tenant building is proposed); and GSA Form
1364, which is entitled "proposal to lease space" and which requires
the offeror to state the square footage of "net usable" (or
occupiable) space proposed, the "net usable" (or occupiable) space
square foot price proposed, and the extended proposed lease price.
This latter form, GSA Form 1364, which the offeror is required to
sign, also states that upon acceptance by the government, the offeror
agrees to provide the stated occupiable space at the amount indicated
on that form. Mecca alleges that the ARC offer was ambiguous because
ARC listed the same square footage (10,418 square feet) on its GSA
Form 1217 as both the entire building's rentable space and the
rentable space to be leased by the government, and then listed, on its
GSA Form 1364, that it was proposing the same amount (10,418 square
feet) of occupiable space. Mecca also states that since the
preliminary drawing submitted with the ARC offer does not verify the
occupiable space (10,418 square feet) listed on ARC's GSA Form 1364,
the offer must be rejected as ambiguous.
Our review of the record shows inconsistencies in both offerors'
forms. Mecca, on its GSA Form 1217, indicated that the "rentable
area" to be leased by the government was 10,432 square feet and then,
on its GSA Form 1364, stated that the same footage was proposed as
"net usable" (i.e., occupiable) space. As Mecca contends, pursuant to
the SFO's terms, rentable and occupiable space footage were to refer
to different amounts of space. Mecca's offer was accepted, however,
despite this flaw. Mecca's argument that the ARC offer should be
rejected as ambiguous because of its forms' inconsistent information
therefore provides no basis to sustain the protest--the protester's
own offer suffers from the same flaw. Rather, we believe it was
reasonable for the agency to discount each of the offeror's GSA Form
1217s, and to instead consider the proposed occupiable space and price
information listed on each offeror's GSA Form 1364 "proposal to lease
space." As noted above, the information on the GSA Form 1217 was to
be used for comparative purposes in cases where a multiple-tenant
building is proposed. Since both offerors here proposed
single-tenant buildings which effectively eliminated the agency's need
for the offerors' GSA Form 1217 pricing information, the GSA Form 1217
was not material to the award selection. Instead, the agency
reasonably relied in its evaluation on the information in the GSA Form
1364, the signed form on which the offerors agreed to provide a stated
amount of occupiable space at the price indicated.
As for Mecca's contention that the drawing in ARC's offer is
inconsistent with its "proposal to lease space" (GSA Form 1364), the
SFO advised that the requirement for drawings to be submitted with the
offers (illustrating building layout) was to enable the agency to
review the drawings to confirm occupiable space for the purpose of
converting rentable space prices to occupiable space prices. As the
protester notes, there is no evidence in the record that the agency
closely reviewed these drawings for this purpose. Occupiable space
prices, however, were already calculated by each offeror in its GSA
Form 1364. The record shows that the agency accepted each offeror's
proposed occupiable space and occupiable space square foot (and
extended) prices as offered on the GSA Form 1364, and that those
occupiable space prices served as the basis of the evaluation for
award, as required by the SFO, without the need for conversion to such
prices from the drawing information. In light of the agency's
across-the-board evaluation of offers on the basis of each offeror's
GSA Form 1364 information, we cannot conclude that the agency's
failure to verify that the offeror's drawings supported the occupiable
space proposed shows that the evaluation was unequal, as the protester
contends. In sum, award was made on the basis stated in the SFO--the
low occupiable space price offered.
To the extent Mecca contends that the agency relaxed or waived for ARC
a material requirement for minimum occupiable space, Mecca has not
demonstrated that ARC failed to comply with the stated minimum of
9,935 square feet occupiable space requirement. The protester's
various calculations, for instance, are flawed in regard to an
allegedly required deduction for a "janitorial room" (not required by
the SFO or proposed by ARC) and "interior partitions" (the SFO only
included deductions for enclosing walls of specifically itemized
areas) and thus do not conclusively show that the minimum requirement
was not met. The importance of the claimed inconsistency between the
awardee's GSA Form 1364 and the drawing in its offer is also minimized
here since that drawing was only preliminary in nature and can be read
as offering expansion space to allow for the occupiable space
proposed.
In any event, even if the awardee's preliminary drawing fails to show
the requisite minimum occupiable space, and even if the agency had
relaxed the minimum space requirement to the extent alleged by the
protester, the record shows that any such relaxation here was de
minimis (accounting for only 17 square feet of the entire building).
The protester, although it alleges prejudice because ARC offered to
construct a lower cost building with slightly less than the required
minimum occupiable space, has not stated that it would have prepared
its offer any differently had it known that slightly less then the
stated minimum occupiable space would be acceptable to the agency.[2]
See Canberra Indus., Inc., B-271016, June 5, 1996, 96-1 CPD para. 269 at
4. All offerors knew that the basis of award here was low price
(among conforming offers), and that the minimum occupiable space limit
was substantially (almost 500 square feet) less than the stated
maximum amount (which maximum amount was proposed by Mecca). The
protester, in its own business judgment, chose to offer a building
which exceeds the SFO's statement of rentable space sought by the GSA
(including additional space not required to meet the SFO's occupiable
space requirements). In other words, the protester at all times knew
that it could offer almost 500 square feet less of occupiable space
and substantially less rentable space than offered, and decrease its
price accordingly, but instead proposed to construct a larger building
than required (with higher associated building costs) at a higher
price, despite the low price basis for award. Prejudice is an
essential element of a viable protest and here, the record simply does
not demonstrate a reasonable possibility that Mecca was prejudiced by
the agency's actions, that is, there is no demonstration here that,
had the agency's alleged relaxation of the minimum space requirement
applied to Mecca as well, the protester would have had a substantial
chance of receiving the award. McDonald-Bradley, B-270126, Feb. 8,
1996, 96-1 CPD para. 54 at 3; see Statistica, Inc., v. Christopher, 102
F.3d 1577, 1581 (Fed. Cir. 1996).
The protest is denied.
Comptroller General
of the United States
1. The agency points out that both the ARC site and the Mecca site are
"less than perfect" but were found to be acceptable. The record
confirms that Mecca's site was found to be acceptable despite the
existence of areas near the site having a less than attractive,
professional appearance, and despite having only one eating facility
(a sandwich shop) open to the public (which would include all SSA
visitors) in the requisite two-block area. Thus, the record shows
that the agency in fact relaxed the SFO's location/amenities terms for
the protester. Under these circumstances, we fail to see how the
protester was prejudiced by any alleged relaxation of the terms for
the awardee.
2. We also note that taking exception to the minimum space requirement
here was not specifically prohibited by the SFO, which stated only
that any exceptions taken to stated requirements were to be set forth
in the offers; the SFO also provided that payment under the lease
would be made for delivered occupiable space less than agreed to at
the occupiable square foot rate stated in the lease, suggesting that
the agency was prepared to allow some flexibility in meeting the space
requirement. We also are not persuaded by Mecca's contention that by
proposing a higher amount of occupiable square feet than is available
within the gross or rentable space of the building depicted in ARC's
preliminary drawing, ARC was unfairly able to spread its costs over a
larger building area and decrease its square foot price, because, as
stated above, ARC proposed and is obligated by the terms of the lease
to provide the 10,418 square feet of occupiable space, as defined in
the SFO, at the firm's offer/lease price. To the extent that Mecca
questions whether ARC will comply with the lease terms, the matter is
one of contract administration not for our review. See 4 C.F.R. sec.
21.5(a) (1997).