TITLE:  Hines Chicago Investments, LLC, B-292984, December 17, 2003
BNUMBER:  B-292984
DATE:  December 17, 2003
**********************************************************************
Hines Chicago Investments, LLC, B-292984, December 17, 2003

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This redacted version has been approved for public release.        

   Decision
    
Matter of:   Hines Chicago Investments, LLC
    
File:            B-292984
    
Date:              December 17, 2003
    
Richard J. Conway, Esq., and Robert J. Moss, Esq., Dickstein Shapiro Morin
& Oshinsky, for the protester.
John S. Pachter, Esq., and Jonathan D. Shaffer, Esq., Smith, Pachter,
McWhorter
& Allen, for Higgins Development Partners LLC, an intervenor.
Carl E. Smith, Esq., and Ruth Kowarski, Esq., General Services
Administration,
for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel,
GAO, participated in the preparation of the decision.
DIGEST
    
1.  Protest that agency improperly failed to evaluate option pricing, as
required under the solicitation, is denied where record shows that option
pricing was in fact considered.
    
2.  Protest that award was improper because, contrary to solicitation
requirement that offered space be vertically and horizontally contiguous,
awardee proposed a vacant floor as expansion space, is denied where
protester was informed during the procurement that agency*s interpretation
of requirement would permit offerors to propose a vacant floor for future
expansion.
    
3.  Agency was not required to hold discussions regarding areas of
protester*s proposal that were weak, but acceptable, and that did not
prevent the protester from having a reasonable opportunity for award.
DECISION
    
Hines Chicago Investments, LLC protests the award of a contract to Higgins
Development Partners, LLC under solicitation for offers (SFO) No.
GS-05B-17010, issued by the General Services Administration (GSA) for the
construction and lease of a field office for the Federal Bureau of
Investigation (FBI) in Chicago. Hines alleges several evaluation and other
improprieties in the procurement.
    

   We deny the protest.
    
The solicitation, which anticipated the award of a 14-year lease, with two
10-year option terms, provided for a *best value* award based on
evaluation of (in descending order of importance) design concepts for
building configuration and expansion; building systems; exterior and
interior design; management plan; and price (which was significantly less
important than the technical factors).[1]  Following the submission and
evaluation of initial proposals, multiple rounds of discussions, and the
submission and evaluation of best and final offers (BAFO), Higgins*s
proposal was rated the highest under the technical factors and offered the
second lowest price, while Hines*s was rated the second highest under the
technical factors and offered the lowest price.  Higgins*s proposal was
selected as the best value to the government and this protest followed. 
    
Hines raises a number of arguments concerning the propriety of the
evaluation and other aspects of the procurement.  We have reviewed the
record and find that Hines*s arguments are without merit.  We discuss the
most significant arguments below.
    
OPTION YEAR PRICING
    
The solicitation provided that the agency would perform a present-value
price evaluation for the base and option periods based on the annual price
per square foot of office area.  Hines asserts that, in making the award
decision, GSA considered only its $0.80 base period cost advantage over
Higgins.
    
This assertion is not supported by the record, which indicates both that
the agency performed a present-value analysis of the offered prices for
the base and option years for the offerors and that, in determining the
best value proposal, the contracting officer based her conclusions on the
present value for the base and option periods.  In this regard, the
contracting officer stated as follows:
    
Higgins* offer was the second lowest, but included significant benefits
judged against the lowest offer and therefore represents the greatest
value to the Government. . . . 
The price differential of the Higgins proposal compared to the lowest
price proposal is [DELETED][2] per occupiable square foot, per annum,
Present Value calculation, considering all price components for the firm
term including the renewal option periods. 
Based on actual dollars, the price differential is [DELETED] per net
rentable square foot based on the rental rate offered by the lower price
proposal.  This price differential is justified to select Higgins because
of their far technically superior offer. 
Price Negotiation Memorandum (PNM) at 57-58.  Hines*s argument seems to be
based solely on the last portion of the quoted contracting officer
finding.  However, there is no basis for disregarding the rest of the
statement and, reading it as a whole, it is clear that the agency did
evaluate the present value of the prices proposed for the base and option
periods, and did consider the differences in those prices when selecting
Higgins for award.  
MANDATORY SOLICITATION REQUIREMENT
    
The solicitation required the space offered to be vertically and
horizontally contiguous.  Hines protests that Higgins*s proposal did not
meet this requirement because Higgins proposed to leave one floor vacant
for future expansion.
    
This argument is without merit.  GSA asserts, and Hines does not dispute,
that during discussions in June 2003 the contracting officer informed
Hines that it interpreted this requirement to allow offerors to propose a
floor of vacant space for future expansion.  Agency Report (AR) at 12. 
Not only was Hines thus aware that a vacant floor would be permitted for
expansion, but Hines itself proposed leaving a vacant floor as an
alternate expansion plan, with no indication it believed this constituted
a deviation from the solicitation requirement.[3]  Hines BAFO, Expansion
Plan Alt. 2.
    
DISCUSSIONS
    
Hines protests that GSA did not hold meaningful discussions with it
because, among other things, GSA did not inform Hines that its proposed
expansion plan was considered a significant weakness in its proposal.
    
While discussions must address at least deficiencies and significant
weaknesses identified in proposals, the scope and extent of discussions
are largely a matter of the contracting officer*s judgment.  Our role in
reviewing the adequacy of discussions is to ensure that agencies point out
weaknesses that, unless corrected, would prevent an offeror from having a
reasonable chance for award; an agency is not required to afford offerors
all-encompassing discussions, or to discuss every aspect of a proposal
that receives less than the maximum score, and is not required to advise
an offeror of a weakness that is not considered significant, even where
the weakness subsequently becomes a determinative factor in choosing
between two closely ranked proposals.  Northrop Grumman Info. Tech., Inc.,
B-290080 et al.,
June 10, 2002, 2002 CPD P: 136 at 6.  Nor is an agency required to
identify weaknesses in a proposal that is technically acceptable, but
presents a less desirable approach than other proposals received. 
Development Alternatives, Inc., B-279920, Aug. 6, 1998, 98-2 CPD P: 54 at
7.
    
The discussions were unobjectionable.  GSA did consider Hines*s expansion
plan weak, and in identifying the differences in Hines*s and Higgins*s
proposals, termed it a significant weakness.  PNM at 32.  Notwithstanding
the use of that term, the weakness was only one of a number of weaknesses
noted in Hines*s proposal under the design concepts subfactor, PNM
at 44-45, and Hines*s proposal was considered fully acceptable under this
subfactor and, in fact, was evaluated in the excellent range.  Source
Selection Evaluation Board Final Report at 34.  In the final analysis, the
weakness in Hines*s expansion plan had no bearing on the award decision;
rather, the agency found that Higgins*s proposal offered enough advantages
to make it the best value to the government.  PNM at 55-58.[4] 
    
EVALUATION
    
Hines complains that GSA unfairly and improperly applied different
standards in evaluating its and Higgins*s proposals.  For example, Hines
notes that its building design was evaluated as lacking architectural
cohesiveness between the main building, the annex and the parking garage;
after being advised of this finding during discussions, Hines changed its
design at significant additional cost.  Hines maintains that Higgins*s
design also lacks architectural cohesiveness, but that the agency did not
downgrade Higgins*s proposal on this basis.
    
This argument is without merit.  GSA explains that it found that Higgins*s
design has architectural cohesiveness because all structures were to be
clad in architectural precast concrete with the same color and finish, all
detailing and finishes for windows and/or exterior doors on all three
structures were to have similar finishes in terms of color and materials,
and windows and glass were to be the same color.  Hines disputes GSA*s
conclusion, arguing, for example, that Higgins*s main office building will
have a glass fac,ade with a thin concrete grid, while the annex will have
no glass or grid.  However, Hines has not provided any authoritative
evidence that the feature it points to indicates a lack of cohesiveness
or, more generally, that its interpretation of architectural cohesiveness
as applied to this project, rather than the agency*s, is the only correct
one.  Hines also has not argued or established that the agency applied a
different standard of architectural cohesiveness in evaluating the two
firms* designs.  Accordingly, Hines has done no more than demonstrate
disagreement with the agency evaluation, which is not a basis for finding
the evaluation unreasonable.  Korrect Optical, B-281800, Apr. 9, 1999,
99-2 CPD P: 4 at 4.
    
The protest is denied.

   Anthony H. Gamboa
General Counsel
    
    

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

   [1] This procurement was conducted in two phases.  This protest concerns
phase II, in which the five most highly qualified offerors under phase I
were invited to compete.
[2] The record shows that the actual differential was [DELETED], and that
the [DELETED] differential included in the analyses was the result of a
mathematical error.  Statement of Contracting Officer, Nov. 26, 2003. 
This error made Hines*s price advantage seem greater than it was, and thus
did not prejudice Hines.
[3] Since the solicitation did not specifically permit alternate proposals
for future expansion, the agency did not evaluate Hines*s alternate plan.
[4] Hines also argues that GSA improperly provided Higgins with more
comprehensive discussions than it provided Hines, since, while it did not
tell Hines that its proposed expansion plan was a weakness, it did tell
Higgins that its expansion plan was a deficiency because it was not
developed or defined.  Protester*s Comments at 16-17. However, since GSA
had found that Higgins*s expansion plan was unacceptable, rather than just
a weakness as with Hines*s plan, this matter had to be brought to
Higgins*s attention.  See Textron Marine Sys. B-255580.3, Aug. 2, 1994,
94-2 CPD P: 63 at 23 n.22.