BNUMBER:  B-281600             
DATE:  March 8, 1999
TITLE: Interproperty Investments, Inc., B-281600, March 8, 1999
**********************************************************************

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.