TITLE:	HG Properties A, LP
BNUMBER:	    B-290416; B-290416.2
DATE:		    July 25, 2002
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HG Properties A, LP, B-290416; B-290416.2, July 25, 2002

Decision


Matter of:   HG Properties A, LP

File:            B-290416; B-290416.2

Date:              July 25, 2002

Thomas W. Rochford, TRS Design & Consulting Services, for the protester.
Dennis Foley, Esq., Philip Kauffman, Esq., and Phillipa L. Anderson, Esq.,
Department  of Veterans Affairs, 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

Lease modification changing location of site for construction of offered
building space remains within the scope of the underlying lease, so that
resolicitation of agency's space requirements is not necessary, where
substituted site meets solicitation's geographical requirements and
modification does not change lease price, performance period, basic
responsibilities of parties to the lease, or the nature and purpose of the
lease, so that overall effort under modified lease remains essentially the
same as was contemplated under the original solicitation for offers.

DECISION

HG Properties A, LP protests the modification of lease No. V541R-62, awarded
to Premier Office Complex, Inc. (POC) by the Department of Veterans Affairs
(VA) for the provision of building space for a VA medical facility in
Canton, Ohio.  HG, the incumbent lessor of building space for the agency's
current medical facility in the area, chose not to compete for the lease it
is now challenging.  HG contends, however, that a recompetition of the lease
is now necessary due to an alleged out-of-scope modification to POC's
lease.  Specifically, HG contends that the lease was improperly modified to
allow a change to the site of construction of the lessor's offered building
space; HG argues that the change in location is a cardinal change outside
the scope of the lease awarded to POC which, according to HG, should be
viewed as an improper sole-source award.  In its supplemental protest, HG
also raises, among other contentions, numerous challenges to the agency's
initial award of the underlying lease to POC.

We deny the protests.

On January 26, 2001, the agency issued solicitation for offers (SFO) No.
541-040-01 for approximately 15,000 net usable square feet of building space
for medical/office space located within a delineated geographic area in
Canton, Ohio.  Five amendments were issued to that solicitation to extend
its closing date in an effort to delay the procurement until HG could
resolve an ongoing eminent domain action against a property it would have
liked to offer in response to the SFO.  That SFO, however, was ultimately
cancelled.

Several months later, under a new solicitation, SFO No. 541-018-02, the
agency again set forth its detailed needs for building space for its medical
facility.  Although HG was sent a copy of the new SFO, the firm did not
submit a proposal in response to it; the eminent domain action against HG's
property was not withdrawn until after the date offers were due under the
SFO.  The agency did receive offers in response to the SFO from two other
firms, including POC; the offers were deemed acceptable and found to offer
reasonable prices.

The SFO set out both general and highly specific space requirements to meet
a variety of stated agency needs.  As to the location of offered buildings,
the SFO  provided only general requirements that were to be met.  No
specific property location was identified; rather, offered properties had to
be located within a designated area of consideration, defined in the SFO by
reference to certain city boundaries.  Such properties had to be located in
a prime commercial office district with professional surroundings, be
reasonably accessible to public transportation and highways, and include a
minimum of 125 on-site parking spaces.
SFO ï¿½ï¿½ 1.1--1.3.

The SFO, however, did include detailed and numerous architectural
requirements to be met by the offered building space, and the SFO also
included specific requirements for the lessor to provide certain specialized
services--security services and custodial services--utilities, maintenance,
and environmental management.  Particular design requirements were set out
for waiting and examination rooms, as well as office space for personnel,
and space for equipment storage.  The SFO also set forth highly specialized
specifications for specific medical treatment and laboratory areas required
within the proposed facility.  SFO ï¿½ï¿½ 4.0--10.18.  The leased space was to
be free of hazardous materials.  SFO ï¿½ 8.9.  New construction or substantial
renovation to a quality building of existing sound construction was
generally considered by the agency to be necessary to meet the SFO's
particular requirements.

A lease term of 5 years, with a 5-year renewal option period, was cited in
the solicitation, but offerors were advised that the lease term was
negotiable, as long as the proposed term did not exceed a maximum of 10
years.  SFO ï¿½ 1.4.  A lease was to be awarded to the offeror who submitted
the offer found to be most advantageous to the government considering
location, condition of offered building space, and price.  The solicitation
advised that price could become significantly more important than the
non-price factors combined; in this regard, the SFO indicated that the
location of offered property was not the predominant factor of importance to
the agency under the SFO evaluation scheme.  SFO ï¿½ 2.0.

As stated above, the agency determined that the offers submitted by the two
offerors that responded to the SFO were technically acceptable.  POC's offer
(which was based on construction of a new building on its proposed site) was
considered to be most advantageous to the government in that it offered the
lowest price.  The agency subsequently awarded a lease to POC, dated
February 27, 2001, to meet the stated medical facility space requirements.

Shortly thereafter, POC notified the agency that a post-award inspection of
its offered site of construction of the building space revealed the presence
of hazardous materials.  During its conversation with the contracting
officer on the matter, POC evidently learned of another acceptable site in
the same area, which had been reviewed earlier by the agency.  POC
subsequently suggested a substitution of that site at no cost to the agency
and no change to the performance requirements of the lease.  Since the new
site was only four blocks from the initial property, in the same commercial
district, within the SFO's delineated geographic area of consideration, and
otherwise acceptable under the SFO, the agency agreed to modify the lease to
change only the address of the premises upon which the proposed building
would be constructed.  All other terms of the lease were to stay the same,
including the lessor's responsibility to provide the offered building space
at the same price as awarded, and within the same performance period.  The
supplemental lease agreement effectuating the site change, dated March 7,
cites the SFO's Changes clause, which provides for changes in leased
"facilities or space layout" where the changes are "within the general scope
of the lease."  SFO ï¿½ 33.

More than 2 months after this lease modification was executed, HG filed a
protest against the propriety of the modification, stating that the firm had
just learned of the site change from a newspaper article about the planned
medical facility.  HG argues that because location was a stated factor for
consideration for award under the SFO, the change of site, even if the new
site otherwise meets all of the SFO and lease requirements, is a cardinal
change outside the scope of the lease.  HG argues that this alleged
out-of-scope modification resulted in a sole-source lease to POC that
instead must be recompeted.  HG, which now has a property it can offer to
meet the agency's needs for space for the medical facility, seeks
recompetition of the lease awarded to POC for that facility.

Our Office generally will not consider protests challenging contract
modifications because modifying a contract involves the administration of
the contract, which is outside our bid protest jurisdiction.  Bid Protest
Regulations, 4 C.F.R. ï¿½ 21.3(m)(1) (2002).  Nonetheless, we will review a
protest alleging that a contract modification represents a cardinal change
beyond the scope of the contract and therefore should have been the subject
of a new procurement.  See New Beginnings Treatment Ctr., Inc.--Recon.,
B-252517.5, Apr. 11, 1994, 94-1 CPD ï¿½ 242 at 3.  In assessing whether a
contract modification is outside the scope of the original agreement, we
look to see whether the original nature or purpose of the contract is so
substantially changed by the modification that the original and modified
contracts are essentially and materially different.  In assessing whether
the modified work is essentially the same as the effort for which the
competition was held and for which the parties contracted, we consider, for
instance, factors such as the magnitude of the change in relation to the
overall effort, including the extent of any changes in the type of work,
performance period, and costs between the modification and the underlying
contract.  See Access Research Corp., B-281807, Apr. 5, 1999, 99-1 CPD ï¿½ 64
at 3-4; see also Caltech Serv. Corp., B-240726.6, Jan. 22, 1992, 92-1 CPD ï¿½
94 at 4; Rolm Corp., B?218949, Aug. 22, 1985, 85-2 CPD ï¿½ 212 at 2-3.

Accordingly, the critical question is whether the change in the location of
the site for the construction of the awarded building space is so material
to the overall effort required under the SFO as to be outside of the scope
of the lease awarded here.  In answering this question, we look to the
purpose and nature of the lease, which here required much more than an
amount of space located at a particular address.

As noted above, the lease here incorporates numerous work performance
requirements ranging from the provision of specific, architecturally defined
areas of building space, highly specialized for the needs of a medical
treatment facility, to the provision of specified management, custodial, and
security services.  In our view, the level of detail provided describing the
required configuration and provision of the building space reflects the
relative importance to the agency of obtaining space meeting specific design
and functional requirements.  In contrast, the SFO's property location
requirements are only general in nature and scope--wide location boundaries
were provided in the SFO and only general transportation accessibility was
required, reasonably indicating that specific location within the cited area
simply was not a critical factor to the agency, as long as the property was
within the delineated area and reasonably accessible.  In other words, we
think it is apparent that the location of the specific site offered--as long
as it was within the identified geographic boundaries and otherwise met all
SFO requirements--was not of particular importance under the SFO.

Based on our reading of the SFO as a whole, we think that the change in site
does not, standing alone, materially change the nature or purpose of the
lease with POC.  It is important here to recognize that the substituted
site, only four blocks from the initial site for construction of the
building, meets the SFO's location requirements.  It is also important to
point out that, despite the site change, the lessor remains responsible for
construction of the buiding space bargained for to meet the agency's needs
as detailed in the SFO.  Moreover, both the lease price and the performance
period similarly remain unchanged by the modification.  In sum, given the
totality of specific performance requirements to be met by the lessor, which
remain virtually unchanged by the challenged modification, and the
relatively limited emphasis afforded to specific location under the SFO's
general location requirements, we cannot conclude that the challenged
modification materially changed the nature or purpose of the work to be
provided under the lease awarded to POC.   The record thus supports the
reasonableness of the agency's determination that the challenged
modification is within the scope of the lease.

In a supplemental protest filed by HG more than 3 months after the
underlying lease was awarded to POC, raising issues which allegedly were
based upon HG's review of a copy of that lease included in the agency's
report on HG's initial protest, HG raised numerous challenges to, among
other things, the evaluation and acceptance of the POC offer.  Given the
substantial passage of time since that lease was awarded, however, we
conclude that the challenges are untimely.  A protester is required to
diligently pursue information forming the basis for a protest.  Here, HG
waited months before it requested and reviewed information about that award
for possible bases of protest.  This delay simply does not meet our
requirements for the expeditious pursuit of information.[1]  See
Professional Rehab. Consultants, Inc., B?275871, Feb. 28, 1997, 97-1 CPD
ï¿½ 94 at 2-3.

In any event, we also find that HG lacks the requisite interest to challenge
the terms of the competition or the terms of the award.  Under the bid
protest provisions of the Competition in Contracting Act of 1984, 31 U.S.C.
ï¿½ï¿½ 3551-3556 (2000), only an "interested party" may protest a federal
procurement.  That is, a protester must be an actual or prospective supplier
whose direct economic interest would be affected by the award of a contract
or the failure to award a contract.  31 U.S.C. ï¿½ 3551(2); 4 C.F.R. ï¿½
21.0(a).  A protester is not an interested party where it would not be in
line for contract award were its protest to be sustained.  See Four Winds
Servs., Inc., B?280714, Aug. 28, 1998, 98-2 CPD ï¿½ 57 at 2.  Here, there is
another offeror in line for award under the SFO whose offer was found to be
acceptable and has not
been challenged by HG.  Accordingly, HG, which did not submit an offer under
the SFO, lacks sufficient interest to challenge the propriety of the
evaluation or lease award under the SFO.[2]

The protests are denied.

Anthony H. Gamboa
General Counsel

                          -------------------------

[1]We also find untimely HG's allegations based upon terms of the SFO
indicating the negotiable nature of certain solicitation requirements, as
well as its challenges based on the SFO's provisions regarding available
funding for the award.  Since these contentions essentially stem from terms
in the SFO that were apparent prior to the closing date for the receipt of
offers, they had to be raised before that time.  4 C.F.R. ï¿½ 21.2(a)(1).
HG's contention that the post-award site substitution is an improper late
offer is also untimely--HG first raised this contention in its supplemental
comments, more than 2 months after it filed its initial protest, yet it has
not shown that it did not have or should not have had information about the
substitution to raise the argument at that time.  4 C.F.R. ï¿½ 21.2(a)(2).
[2] We also note that HG also has not shown that any alleged procurement
irregularity kept it from submitting an offer for consideration for award;
the protester thus has not shown that it has suffered any competitive harm
from any action by the agency or from the terms of the lease awarded to POC
after a competition among those offers submitted under the solicitation;
prejudice is a required element of a viable basis of protest.  See
McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD ï¿½ 54 at 3; see
Statistica, Inc. v. Christopher, 102 F. 3d 1577, 1581 (Fed. Cir. 1996).