BNUMBER: B-281600
DATE: March 8, 1999
TITLE: Interproperty Investments, Inc., B-281600, March 8, 1999
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Matter of:Interproperty Investments, Inc.
File:B-281600
Date:March 8, 1999
W. Blaine Early, III, Esq., Stites & Harbison, for the protester.
Gary W. Napier, Esq., and Jill Osborne Edwards, Esq., Napier, Reece &
Associates, for Bimble, an intervenor.
John C. Ringhausen, Esq., General Services Administration, for the
agency.
C. Douglas McArthur, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Where agency advertised requirement for lease space in two local
newspapers, as prescribed in General Service Administration
regulations, and denies any deliberate attempt to exclude protester
from competing, its failure to solicit incumbent lessor does not
warrant sustaining protest, where agency otherwise obtained full and
open competition and a reasonable price.
DECISION
Interproperty Investments, Inc. protests the award of a contract to
Bimble under solicitation for offers (SFO) No. 7KY0036, issued by the
Southeast Sunbelt Region of the General Services Administration (GSA).
Interproperty asserts that the agency deliberately excluded
Interproperty, the incumbent lessor, from the competition.
We deny the protest.
The protester currently leases some 13,000 square feet of office space
to the Mine Safety and Health Administration (MSHA). In late 1996,
the agency issued a SFO for a new lease (17,575 square feet), to which
the protester responded; the agency subsequently canceled the
solicitation because MSHA was undergoing a reorganization, which made
its requirements uncertain. Letter from MSHA to Contracting Officer
(Apr. 23, 1997). The protester did not object, in view of the
agency's decision to extend the existing lease for another year, with
two 1-year option periods. Affidavit of Gregory Parsons, Nov. 25,
1997, at 2.
In January 1998, MSHA submitted a new request to lease 17,035 square
feet of office space in the Barbourville, Kentucky area. The agency
placed advertisements in the February 5 Mountain Advocate, a local
Barbourville paper, and in the Sunday, February 8 Cincinnati Enquirer,
which circulates in northern Kentucky. The advertisement requested
responses by March 2, and, by that date, the agency had received five
responses, offering nine sites. The incumbent did not respond.
MSHA surveyed the sites and identified five of them as acceptable;
MSHA also advised the agency that sites outside the city limits would
be acceptable, as long as they were close to the city limits. Market
Survey Summary, Apr. 13, 1997; Letter from Contracting Officer to
Protester at 2 (Nov. 20, 1998) (response to Agency-level Protest).
The agency produced a mailing list including the five firms that had
responded to the newspaper advertisements and issued them copies of
the SFO, dated May 14, 1998. Although MSHA had approved the Bimble
site, outside the Barbourville city limits, during its survey, the SFO
stated that the area of consideration was limited to sites "[w]ithin
the city limits of Barbourville, Kentucky." SFO sec. 1.2. The SFO, sec.
1.4, required that the space or site offered be located "not less than
150 feet and not more than 300 feet from a main thoroughfare" to
ensure visibility by the local police, and advised offerors that, to
eliminate any perception of a conflict of interest, the agency would
accept no offers from coal companies or environmental groups.
By the June 30 closing date, all five firms had responded. The agency
conducted negotiations and requested best and final offers, which all
offerors submitted in early October. On the basis of price, the
agency selected the Bimble site for award. After the selection of
Bimble, but before the agency issued an official notification of
award, the protester learned of MSHA's plans to move to the Bimble
building and contacted the contracting officer. In a telephone
conversation of October 22, with an Interproperty representative, the
contracting officer confirmed the agency's plans, advising the
protester of his efforts to advertise the procurement and declining to
delay award to allow Interproperty to submit an offer. On October 22,
1998, the agency awarded the lease to Bimble, and Interproperty filed
a protest with the agency and subsequently to our Office.
Interproperty contends that the SFO did not comply with the
requirement for full and open competition because the agency denied
Interproperty, the incumbent lessor, the opportunity to submit an
offer. Interproperty further contends that the failure to solicit the
protester was deliberate. The president of Interproperty asserts
that, when the agency canceled the solicitation in 1997, he requested
to be notified of future solicitations. Affidavit of Gregory Parsons,
Nov. 25, 1997, at 2. His stepmother, who lives in Harlan County and
who helps to manage the firm's existing leases, testifies to
conversations with the contracting officer in July 1998, concerning
repair work under another lease, in the course of which she
specifically asked whether there were any SFO's pending and was told
that there were none. Affidavit of Lanola Parsons, Nov. 25, 1997, at
1. She further states that during her conversation with the
contracting officer on October 22, the contracting officer stated that
he had deliberately avoided notifying Interproperty because he did not
believe Interproperty's existing building would meet the requirement
that the site not be more than 300 feet from a main highway.[1] Id.,
at 2-3. The protester also asserts that with a long-term tenant
on-hand, it had no reason to "scour" local newspapers to seek new
leasing opportunities and did not see the advertisements. Protester's
Comments, Jan. 6, 1999, at 2.
The contracting officer denies that he deliberately failed to provide
Interproperty the opportunity to compete. Letter from Contracting
Officer to Protester at 3 (Nov. 20, 1998). He did not recall Ms.
Parsons asking about pending solicitations in July and notes that, as
far as he was concerned, she was merely handling housekeeping issues
and that he would not expect her to make such an inquiry on behalf of
Interproperty. Further, agency counsel points out, at the time of the
telephone conversation, the agency had already received initial
proposals. Agency Comments on Hearing, Feb. 17, 1999, at 2, 3. The
agency notes that it received five offers and made an award at a price
substantially lower than that under the existing lease.[2] It did
not, agency counsel argues, deny Interproperty the opportunity to
compete; the protester simply did not respond to the newspaper
advertisements and did not submit an offer.
The Competition in Contracting Act of 1984 requires contracting
agencies to obtain full and open competition, and this is accomplished
only where (1) all qualified vendors are allowed and encouraged to
submit offers on federal procurements; and (2) a sufficient number of
offers is received to ensure that the government's requirements are
filled at the lowest possible cost. Cutter Lumber Prods. B-262223.2,
Feb. 9, 1996, 96-1 CPD para. 57 at 2. Where the agency fails to solicit a
successfully-performing incumbent, with the result that there is only
a minimal level of competition, it does not meet its obligation of
obtaining full and open competition. Professional Ambulance, Inc.,
B-248474, Sept. 1, 1992, 92-2 CPD para. 145 at 2-5. Similarly, we have
sustained protests where the agency makes a deliberate or conscious
attempt to preclude the protester from competing. Bosco Contracting,
Inc., B-270366, Mar. 4, 1996, 96-1 CPD para. 140 at 3. The record here
provides no basis for sustaining the protest.
Here, the agency followed its procedures for advertising this lease.
The agency's regulations here, which establish the procedures for
contracting for leasehold interests in real property, require only
that leases for more than 10,000 square feet be publicized in local
newspapers and may be posted on an on-line information system. 48
C.F.R. sec. 570.302 (1998). The agency maintains mailing lists for
leases over 20,000 square feet at its Atlanta regional office; for
smaller leases, such as the one here, the mailing list is composed of
firms that respond to the initial newspaper notices. The agency
advertised this lease in the local Barbourville newspaper and another
newspaper which circulated in a broader area--northern Kentucky.
There is no allegation that the agency's choice of newspapers was not
appropriate for the agency's purpose--to apprise all responsible
sources in the Barbourville area of the competition. The protester
offers no explanation for its failure to see the advertisement, beyond
its statement that, with a lease in place, it saw no reason to pursue
other business.
We find no evidence that the contracting officer deliberately excluded
the protester from competing. In order to resolve this allegation,
our Office conducted a telephonic hearing during which the
Interproperty representative and contracting officer testified.
The hearing confirmed that the Interproperty representative first
spoke with the contracting officer in July 1998, about lease
administration matters, after the agency had received initial offers
for the lease here.[3] Regarding telephone calls made to the
contracting officer beginning on October 19, the contracting officer
acknowledged that, upon returning from vacation, his first priority
was to respond to calls and messages related to lease administration
matters. He deferred matters related to ongoing procurements,
including the notice of award to Bimble, until October 22, the date
upon which he responded to Interproperty's telephone calls and upon
which he sent the notice of award to Bimble, because "[it] took me
almost a day and a half to get through the phone calls and the e-mail
messages." He stated that he handles 110 leases in Kentucky and thus
could not give Interproperty's phone calls priority because he "[was
trying] to get lease administration issues ironed out." Transcript at
24. He further stated that the July phone calls involved other leases
and, in view of the types of matters with which he was dealing with
Ms. Parsons--concerns about heating and air conditioning and
janitorial work--he did not believe Ms. Parsons to be representing
Interproperty for pending procurements; in any event, he does not
remember her asking about pending procurements, at any time, and
denies that he stated he deliberately failed to solicit Interproperty.
The testimony of the parties did not establish that the contracting
officer deliberately failed to solicit Interproperty, and, in any
event, these conversations occurred after the receipt of initial
proposals, too late for submission of a proposal.
Based on this record, we cannot conclude that the contracting
officer's failure to apprise Interproperty of the procurement was
either deliberate or contrary to regulation. In the absence of
conclusive evidence that the agency deliberately excluded
Interproperty from the competition, and given that the agency received
five offers and made an award at a price lower than the other
competitors' prices, as well as that under the existing lease, we see
no basis to conclude that the agency did not meet its statutory
obligation. Cutter Lumber Prods. B-262223.2, supra, at 3 (absent any
evidence of a deliberate attempt to exclude the incumbent, the key
considerations in determining whether absence of the incumbent
resulted in a failure to obtain full and open competition are the
number of competitors and the agency's ability to obtain a reasonable
market price).
Interproperty also contends that Bimble's offer did not meet
solicitation requirements, in that it is located outside the
Barbourville city limits and violates the conflict of interest
provision in the solicitation because an officer of Bimble is
associated with a coal company. The record here shows that the agency
did not strictly apply the SFO requirement for a location within the
city limits, since MSHA had already determined that the Bimble
location met its actual needs. Although the owner of the Bimble site
previously had a mining permit, he did not engage in mining but in
washing coal; the intervenor denies that he is involved in coal
mining. In any event, since we have concluded that the failure to
solicit Interproperty provides no basis for resolicitation,
Interproperty, which did not submit a proposal, is not an interested
party to challenge the acceptability of Bimble's proposal, given that
there are other parties in line for award if we were to sustain the
protest on the grounds that the agency should have rejected the Bimble
proposal. Award to the offeror next in line, not resolicitation,
would be the appropriate remedy. Continental Serv. Co., B-274531,
Dec. 17, 1996, 97-1 CPD para. 9 at 8.
The protest is denied.
Comptroller General
of the United States
1. The parties now agree that the protester could have met this
requirement in several ways, most easily by extending the existing
parking lot. Comments at 2-3.
2.$10.98 per square foot versus the current $12.24 per square foot.
3. These matters concerned another building that Interproperty leased
to MSHA in Whitesburg, Kentucky.