BNUMBER: B-281497
DATE: February 17, 1999
TITLE: Ciaschi Rentals, Inc., B-281497, February 17, 1999
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Matter of:Ciaschi Rentals, Inc.
File: B-281497
Date:February 17, 1999
Edward C. Hooks, Esq., Harris, Beach & Wilcox, for the protester.
Lynn W. Flanagan, Esq., Department of Agriculture, for the agency.
Wm. David Hasfurther, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably decided to take corrective action and resolicit for
lease of office space to ensure a fair and impartial competition,
where agency review of proposed award of lease disclosed that source
selection was not documented and was based on unsupported evaluation
conclusions, and where pricing information and other source sensitive
information apparently had been disclosed to several offerors.
DECISION
Ciaschi Rentals, Inc. protests the cancellation of a solicitation for
offers (SFO), issued by the Farm Service Agency (FSA), US Department
of Agriculture (USDA), for the purpose of obtaining a 5-year lease for
6665 square feet of office space in Ithaca, New York, to serve as the
new USDA Service Center for Tompkins, Schuyler, Chemung, and Seneca
counties.
We deny the protest.
The SFO was issued by the FSA's Tompkins/Schuyler County Food and
Agriculture Council (local FAC), which was also responsible for
evaluating the offers received and awarding the lease, with the
concurrence of the New York State FAC (state FAC). The local FAC was
comprised of members of FSA and other locally based agencies which
would occupy the leased office space. USDA Memorandum of Law at 1-2.
Lease offers were to be evaluated on the basis of cost (the annual
price per square foot) and technical merit (in accordance--after the
space was determined to be in conformity with SFO requirements--with
nine evaluation factors listed in descending order of importance).
Price and technical merit were each to constitute 50 percent of the
total evaluation score awarded. SFO at 8. After the successful
offeror was determined on the basis of the cost and technical merit
scoring, award was to be made "upon written notification, or execution
of the lease" by the County Executive Director of the local FAC. Id.
at 9.
The local FAC evaluated the six offers received with the following
results:
Offeror Total Cost Cost Score Tech. Score Total Score
William Fransden #2$21.10/sq. ft.39 47 86
ICS Development Partners$19.00 43 43 86
William Fransden #1$22.10 37 48 85
Ciaschi Rentals$17.00 48 33 81
Poalangeli Contractors$22.65 36 35 71
Center Ithaca TSDAssocs.$16.44 50 13 63
Technical Evaluation Scoring at 1-6; Cost and Technical Analysis at
1-2.
Based upon this evaluation, award of the lease to Fransden on the
basis of its #2 offer was recommended. By letter of July 30, 1998,
the local FAC forwarded the award recommendation to the state FAC.
Memorandum from Local FAC to State FAC (July 30, 1998); FAC Minutes of
July 29, 1998, at 1.
After the submission of the award recommendation, by letter of August
11, Tompkins County Soil and Water Conservation District protested to
the state FAC the location and road safety of the site proposed by
Fransden. Letter from Tompkins County Soil and Water Conversation
District to State FAC (Aug. 11, 1998). By letter of August 19, the
USDA Natural Resources Conservation Service requested the state FAC to
further study what constituted a reasonable price for the lease.
Letter from Natural Resources Conservation Service to State FAC (Aug.
19, 1998). By letter of August 20, USDA New York Rural Development
contended that three of the offers received were nonresponsive and
requested an explanation of why the Fransden lease was so beneficial
as to merit the price. Letter from New York Rural Development to
State FAC (Aug. 20, 1998). By memorandum of August 20, the state FAC
requested the local FAC to reevaluate the market survey for the lease
and to request clarifications from Ciaschi and Center Ithaca regarding
their costs. Memorandum from State FAC to Local FAC (Aug. 20, 1998).
Also, on August 24 and 25, respectively, Center Ithaca and Ciaschi
responded to requests for clarifications. The local FAC informed the
state FAC that realistic lease prices could not be obtained without
providing potential lessors with the agency's building specifications
and that the parking available at Ciaschi's site could be inadequate.
Memorandum from Local FAC to State FAC (Aug. 20, 1998). A lease
market survey was completed in late August which showed that only one
site (which was outside the area to which this lease had been
restricted) was available at that time, and that the lease, if there
were available sites, should cost from $12 to 18 per square foot.
Memorandum to State FAC (Sept. 2, 1998).
On September 9, the state FAC met to discuss the site location that
would best meet the concerns of the parties that would occupy the
Service Center and how Fransden's rent could be justified in view of
the lower rent offered by Ciaschi. Minutes of State FAC Meeting,
September 9, 1998. The state FAC selected Ciaschi's offer. Id.;
Memoranda from State FAC to Local FAC (Sept. 10 and 18, 1998). The
state FAC then directed the local FAC to award the lease to Ciaschi.
Id. By letter of September 21, the County Executive Director advised
Ciaschi that, in accordance with instructions from the state FAC,
"this letter confirms the lease award to Ciaschi . . . We will
contact you in the near future to arrange a time and date for you to
stop to sign the lease agreement." Letter from Local FAC to Ciaschi
(Sept. 21, 1998).
Subsequent to this notification, protests were filed by Center Ithaca
and ICS challenging the selection decision. Memorandum of Law at 5.
By letter of Oct. 19, 1998, the state FAC advised offerors that upon
review of those protests, the September 21 notice of award to Ciaschi
was cancelled and that the state FAC would shortly issue a new SFO and
perform the technical evaluations. Letter from State FAC to Ciaschi
(Oct. 19, 1998).
Contracting officials in negotiated procurements have broad discretion
to take corrective action where the agency determines that such action
is necessary to ensure fair and impartial competition. We do not
believe that an agency must conclude that a protest is certain to be
sustained before it may take corrective action; where the agency has
reasonable concern that there were errors in the procurement, even if
the protest could be denied, we view it as within the agency's
discretion to take corrective action. See Main Bldg. Maintenance,
Inc., B-279191.3, Aug. 5, 1998, 98-2 CPD para. 47 at 3. Moreover, we will
not object to the specific proposed corrective action, so long as it
is appropriate to remedy the concern that caused the agency to take
corrective action. Id.
Center Ithaca's agency-level protest that challenged the award alleged
that government personnel had disclosed procurement sensitive
information to other offerors during the competition. Center Ithaca
Protest Letter, Oct. 2, 1998, at 1. Center Ithaca's protest contained
copies of local FAC evaluation documents including scores and ranking.
ICS in its agency-level protest also argued that it should have
received the lease based on its ranking and score. (Its protest
letter contained its score and Ciaschi's.) ICS Protest Letter, Oct.
8, 1998. According to Center Ithaca, it received the evaluation
documents and prices in response to "requests under the Freedom of
Information Act." Id. at 2. As a result, the state FAC was concerned
that source sensitive information was improperly released. Further,
it appears that Ciaschi may also have been provided agency estimates
for utilities and other services obtained under the prior attempt to
obtain this office space. The agency explains that Ciaschi's original
offer under that SFO did not include the costs for utilities and other
services. The local FAC used an estimated figure for these services
for evaluation purposes. Ciaschi's subsequent revised offer was
identical in cost to the estimated figure used by the agency for the
evaluation. See Memorandum of Law at 1, 8. The USDA's Office of
Inspector General has been asked to review the acquisition for
possible procurement integrity violations. Id. Based on its concerns
regarding the allegations of procurement irregularities in the local
competition, the state FAC elected to cancel and resolicit. An agency
may properly cancel a solicitation where that decision is reasonably
based on agency concerns that the integrity of the procurement process
appears to have been undermined by the improper conduct of an agency
procurement official. See DGS Contract Servs., B-243647.2, Sept. 18,
1991, 91-2 CPD para. 258 at 2.
Moreover, during the course of this protest the agency identified an
additional reason for canceling this lease acquisition and to
resolicit. The agency reports that, in reviewing the state FAC's
decision to award to Ciaschi, the agency found no documentation
supporting the state FAC's apparent reevaluation of the offers that
led to the reversal of the local FAC's decision. As the agency points
out, there is no reference in the state FAC's meeting notes that the
group used the evaluation scheme in the SFO in selecting Ciaschi.
After reviewing the record, we have no basis to disagree with the
agency's conclusion that the state FAC provided no adequate support
for its determination to make award to Ciaschi, thus reversing the
local FAC's decision to award to Fransden. For example, we note that
although the local FAC determined, as part of its evaluation of
offers, that the location of Ciaschi's office space was not suitable
for the FSA's needs because of its layout, the need for extensive
remodeling, and limited parking, the state FAC simply concluded that
Ciaschi's location and parking were acceptable without providing any
reasoning for this conclusion. See Technical Evaluation Worksheet for
Ciaschi, undated. It is also not clear whether the state FAC
evaluated the ICS offer, which was the second highest scored offer
(after Fransden's #2 offer), and might arguably have been in line for
award. Without adequate support for the state FAC evaluation, a
proper award could not be made. Engineering and Computation, Inc.,
B-261658, Oct. 16, 1995, 95-2 CPD para. 176 at 3.
In view of the flawed evaluation and other possible procurement
irregularities including disclosure of the technical evaluations,
scoring, ranking and prices of the competitors, we think the agency's
decision to cancel and resolicit constituted reasonable and
appropriate corrective action.[1]
The protest is denied.
Comptroller General
of the United States
1. Even assuming Ciaschi's contention that the September 21 letter
constituted an award of the lease, Ciaschi's assertion that it is owed
damages for the agency's breach of that lease concerns a dispute
between Ciaschi and the agency that is not reviewable by our Office.
See 4 C.F.R. sec. 21.5(a) (1998); Aero Realty Co., B-250985, Mar. 2,
1993, 93-1 CPD para. 191 at 4 n.6.