TITLE: B-400107; B-400107.2, Exec Plaza, LLC, August 1, 2008
BNUMBER: B-400107; B-400107.2
DATE: August 1, 2008
*****************************************************
B-400107; B-400107.2, Exec Plaza, LLC, August 1, 2008
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: Exec Plaza, LLC
File: B-400107; B-400107.2
Date: August 1, 2008
Fernand A. Lavallee, Esq., Jeffery R. Keitelman, Esq., and Eric M.
O'Neill, Esq., DLA Piper US LLP, for the protester.
Edith Toms, Esq., and Elizabeth Johnson, Esq., General Services
Administration, for the agency.
Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest challenging terms of a solicitation for lease of office space that
apply only to the incumbent lessor is denied where the agency demonstrates
that the requirements are reasonable, despite imposing unequal burdens on
the protester.
DECISION
Exec Plaza, LLC (Exec) protests the terms of solicitation for offers (SFO)
08-008, issued by the General Services Administration (GSA) for the lease
of office space for the National Cancer Institute (NCI), a division of the
National Institutes of Health (NIH). The protester contends that the
solicitation is unduly restrictive of competition because it contains
burdensome requirements that apply only to the incumbent lessors.
We deny the protest.
BACKGROUND
The SFO seeks offers for the lease by GSA of approximately 574,164 square
feet of office space in Rockville, MD, on behalf of NCI. GSA currently
leases office space for NCI under multiple leases in four buildings in
Rockville at 6120 and 6130 Executive Boulevard (these two buildings are
owned by the protester and are collectively known as "Executive Plaza"),
6116 Executive Boulevard, and 2115 East Jefferson Street. The office space
for NCI is provided under [deleted] separate leases: [deleted] leases for
Executive Plaza, [deleted] lease for 6116 Executive Boulevard, and
[deleted] leases for 2115 East Jefferson Street. Contracting Officer (CO)
Statement at 1. The current leases at Executive Plaza were entered into in
April 1986 for a 10-year term, and were subsequently extended through
non-competitive lease extensions. The leases are due to expire in
September 2009.
The SFO was issued on February 29, 2008. The SFO states that offers will
be evaluated on the basis of four non-price technical factors, in
descending order of importance: building characteristics, location, site
parameters, and key personnel and past performance.[1] SFO sect. 2.3. The
SFO states that the award will be made to the offeror "whose offer will be
most advantageous to the Government and provides the best value to the
Government." Id. In selecting the successful offer, the "technical
evaluation factors, when combined, are significantly more important than
price." Id. The SFO anticipates the award of a lease for a 10-year term
beginning "anytime between August 2011 and February 2012." SFO sections
1.5, 1.7. The solicitation requires the proposed office space to have a
single owner, and be managed by a single management group. SFO sect. 1.4.
Exec filed this protest on April 25. The agency subsequently received
[deleted] offers by the April 28 closing date, including Exec. In its
protest, Exec argued that the SFO was unduly restrictive of competition
because it placed numerous requirements on Exec as an incumbent lessor
that did not apply to other offerors. On May 28, the agency submitted its
report on the protest. On June 6, Exec submitted its comments on the
agency report, arguing that the agency's report did not provide a
reasonable basis for the restrictive SFO provisions. On June 19, GSA
submitted a supplemental agency report addressing the protester's initial
arguments, as well as its comments on the initial agency report. As part
of this supplemental report, GSA stated that it had issued amendment No. 2
to the SFO, which revised the solicitation regarding certain of the
requirements challenged in Exec's protest. GSA's June 19 supplemental
report also contained a justification and approval (J&A) for extension of
the Executive Plaza leases on a non-competitive basis. The J&A states that
extension of the Executive Plaza leases is required to establish a common
termination date with the other lessors of NCI office space, and to avoid
costs that would be incurred by a short-term relocation of NCI prior to
the new lease. Supp. Agency Report (AR), attach. 1, J&A for Lease
Extension, at 2-3.
Based on the revisions to the SFO, GSA argued that certain of Exec's
arguments were rendered moot. In its comments on the agency's June 19
supplemental report, as well as in other briefings to our Office, Exec
argues that the changes in SFO Amendment No. 2 do not resolve its protest
grounds, and that the solicitation remains unduly restrictive of
competition.[2]
The solicitation, as amended, contains general requirements that apply to
all offerors, as well as specific provisions in SFO amendment No. 2 sect.
1.20 that apply only to the incumbent lessors. The SFO requires offerors
to propose office space as a "warm lit shell," meaning that the space must
provide basic construction elements such that the base structure, common
areas such as lobbies, stairwells and elevators, power, heating, cooling,
and ventilation systems, garages, and restrooms.[3] SFO amend. 2 sect.
1.9, 1.20. The warm lit shell does not include "tenant improvements,"
i.e., completed interior office space required to meet the tenant agency's
program of requirements (POR). SFO sect. 1.10. After award, the SFO
anticipates that GSA and the lessor will negotiate construction of new
tenant improvements to meet the POR, utilizing a tenant improvement
allowance of $42.08 per square foot. SFO sect. 1.10. The tenant
improvement allowance is an amount per square foot that a lessor must
provide for construction of improvements for the tenant agency. Although
the lessor must perform the work at the outset of the lease, the
government pays the lessor the allowance amortized over a period set forth
in the lease. SFO sect. 1.8(E); see also, 41 C.F.R. sect. 102-85.90-.100
(2008).
With respect to non-incumbent offerors who propose buildings with existing
tenant improvements, the SFO states that these offerors must assume that
the existing improvements will be demolished, as follows:
Demolition. All required demolition is at the Lessor's expense and
offers should be priced accordingly. Notwithstanding sect. 1.11(A)(4)
[concerning credits towards the tenant improvement allowance], any
offeror proposing an existing building with existing tenant improvements
must assume that all existing improvements must be demolished in order
to provide for the Government's new POR.
SFO amend. 2 sect. 1.9(A)(15).
With respect to incumbent offerors, the initial SFO explained that the
"majority of this requirement is currently located at 6116, 6120 and 6130
Executive Boulevard, Rockville, MD (the `Executive Boulevard
Properties')," and that the incumbent lessors' buildings will require
"modernization" to meet the requirements of the solicitation. SFO sect.
1.20(A). Despite renovations over the course of approximately 23 years of
tenancy, GSA states that the Executive Plaza buildings do not meet all of
the current warm lit shell requirements, and that the interior space
requires new tenant improvements to meet the anticipated POR for office
configurations. CO Statement at 1-2. In particular, GSA states that
renovation of Executive Plaza will be required to address the
consolidation of the NCI office space from the numerous current locations
to the consolidated requirements of the new lease. Id. at 2.
The SFO also advised the incumbent offerors to "assume that all existing
tenant improvements must be demolished in order to provide the
Government's new POR." SFO amend. 2 sect. 1.20(A). Because the
modernization of the incumbent offerors' properties will require all or
portions of the building to be vacant from time to time during
modernization, the incumbent offerors must also propose, at their own
expense, swing space for the NCI staff, as follows:
During modernization, the Lessor(s) of the Executive Boulevard
Properties will be responsible for providing and paying for swing space
(temporary alternate space) equal in size to the amount of space vacated
from time to time in the Executive Boulevard Properties ("Swing Space").
SFO sect. 1.20(B).
Additionally, the incumbent-specific solicitation provisions state that
"the Executive Boulevard Properties must meet all of the requirements of
the SFO, including all security requirements outlined in Section 9.0 of
this SFO." SFO amend. 2 sect. 1.20(G).
DISCUSSION
The protester argues that the SFO is unduly restrictive of competition
because it contains numerous requirements which unreasonably place Exec at
a competitive disadvantage.[4] As discussed in detail below, we address
the protester's arguments that the terms of the SFO unreasonably: (1)
require Exec to demolish its existing tenant improvements, (2) apply
materially different and unequal security requirements to Exec, (3)
require Exec to provide swing space during the renovation of Executive
Plaza, and (4) require offerors to have single ownership of the proposed
properties. We find no merit to any of the protester's arguments.[5]
While a contracting agency has the discretion to determine its needs and
the best method to accommodate them, those needs must be specified in a
manner designed to achieve full and open competition. Mark Dunning Indus.,
Inc., B-289378, Feb. 27, 2002, 2002 CPD para. 46 at 3. Solicitations may
include restrictive requirements only to the extent they are necessary to
satisfy the agency's legitimate needs. 41 U.S.C. sections 253a(a)(1)(A),
(2)(B) (2000). Where a protester challenges a specification as unduly
restrictive of competition, the procuring agency has the responsibility of
establishing that the specification is reasonably necessary to meet the
agency's needs. Chadwick-Helmuth Co., B-279621.2, Aug. 17, 1998, 98-2 CPD
para. 44 at 3. A protester's mere disagreement with the agency's judgment
concerning the agency's needs and how to accommodate them does not show
that the agency's judgment is unreasonable. USA Fabrics, Inc., B-295737,
B-295737.2, Apr. 19, 2005, 2005 CPD para. 82 at 5.
As a general matter, we have previously addressed arguments by incumbent
lessors that requirements in a solicitation that apply only to the lessor
are unduly restrictive of competition. While we recognize that, in certain
instances, incumbent lessors may face unique and unequal burdens as
compared to non-incumbent offerors when solicitations require demolition
and renovations, such disadvantages are not necessarily unreasonable or
unduly restrictive of competition. See Paramount Group, Inc., B-298082,
June 15, 2006, 2006 CPD para. 98 at 5.
The government is also not required to perpetuate a competitive advantage
that an offeror may enjoy as the result of its performance of the current,
or a prior, government contract. Inventory Accounting Serv., B-286814,
Feb. 7, 2001, 2001 CPD para. 37 at 4. Conversely, an agency is not
required to neutralize a competitive advantage that a potential offeror
may have by virtue of its own particular circumstances where the advantage
does not result from unfair action on the part of the government. Military
Waste Mgmt., Inc., B-294645.2, Jan. 13, 2005, 2005 CPD para. 13 at 4. As
long as an agency reasonably identifies its needs and allows offerors the
opportunity to meet those needs, the fact that an offeror may have an
advantage based on its ability to more readily meet the government's
needs, as compared to another offeror, does not mean that the solicitation
is unduly restrictive of competition. See HG Props. A, L.P., B-280652,
Nov. 2, 1998, 98-2 CPD para. 104 at 4-5.
Demolition of Existing Tenant Improvements
Exec argues that the requirement to demolish existing tenant improvements
is unreasonable. The protester contends that (1) the SFO requires Exec,
but not non-incumbent offerors, to demolish its existing tenant
improvements, and (2) the demolition requirement is prejudicial to the
protester's ability to compete for the lease because it imposes additional
costs and does not allow Exec to take advantage of existing, high-value
tenant improvements in Executive Plaza. The agency argues that the SFO
demolition requirements apply equally to all offerors, and that the
requirements are a reasonable way to meet the agency's requirements. For
the reasons below, we conclude that the record does not support Exec's
arguments, and that the demolition requirement is reasonable.
The SFO, as amended, requires offerors to propose office space as a warm
lit shell, without tenant improvements. The SFO states that offerors must
assume that existing tenant improvements will need to be demolished. The
demolition requirements are set forth in two provisions, one that applies
generally to all offerors, and one that applies to Exec:
Demolition. All required demolition is at the Lessor's expense and
offers should be priced accordingly. Notwithstanding sect. 1.11(A)(4),
any offeror proposing an existing building with existing tenant
improvements must assume that all existing improvements must be
demolished in order to provide for the Government's new POR.
SFO amend. 2 sect. 1.9(A) (generally applicable requirements).
In addition, all required demolition will be at the Executive Boulevard
Properties expense and its offer should be priced accordingly.
Notwithstanding sect. 1.11(A)(4), since the Executive Boulevard
Properties will be proposing to offer an existing building with existing
tenant improvements, the Executive Boulevard Properties must assume that
all existing tenant improvements must be demolished in order to provide
the Government's new POR.
SFO amend. 2 sect. 1.20(A) (incumbent-specific requirements).
First, the protester contends that because SFO sect. 1.20(A) specifically
states that "the Executive Boulevard Properties must assume that all
existing tenant improvements must be demolished," the incumbent offeror is
being treated unequally from other offerors. As the agency notes, however,
the demolition requirement clearly applies to all offerors with existing
tenant improvements. Both the general and incumbent-specific requirements
use identical language, stating that offerors must "assume that all
existing improvements must be demolished in order to provide for the
Government's new POR." SFO sect. 1.9(15), 1.20(A). Although the
requirement regarding the incumbent lessors is duplicative, we find no
basis to conclude that the requirements are unequal or impose different
obligations on incumbent and non-incumbent offerors.
Next, the protester argues that it is specifically disadvantaged by the
requirement to demolish existing improvements. Exec states that it has
recently made improvements at Executive Plaza which would need to be
demolished under the terms of the SFO. Thus, the protester argues, the
demolition requirements are prejudicial to its ability to compete for the
lease because the existing improvements will be "wasted," and "therefore
add an additional time and cost burden" on the protester. Protester's
Comments, June 9, 2008, at 10.
GSA argues that demolition of existing improvements is required to meet
the warm lit shell requirements. The agency states that the warm lit shell
approach "allows the tenant agency to design the interior spaces to its
own unique needs and to increase its flexibility by not being constrained
to existing space configurations." Supp. AR, July 9, 2008, at 6. GSA also
states that the warm lit shell approach allows offerors to offer leased
space on an equal basis, thereby enabling the agency to make a better
comparison between offerors who are proposing based on uniform
requirements. Id.
In a similar protest, our Office determined that GSA's rationale for
requiring a warm lit shell was reasonable in light of the agency's
requirement to have flexibility in configuring its office space
requirements and the need to have a common basis for comparison of
offerors' proposed properties. Paramount Group, supra, at 4-5. We think
the rationale in Paramount Group applies here as well, and therefore
conclude that the agency's requirement for demolition of existing
improvements is reasonable. Further, the record does not support the
protester's argument that its existing improvements will be "wasted," as
the SFO does not require offerors to demolish all improvements, but
instead requires offerors to assume for purposes of their offers that
demolition will be required.[6]
Applicability of Security Requirements to Exec
Next, the protester argues that the SFO imposes certain security
requirements on Exec that do not apply to other offerors. GSA argues that
SFO amendment No. 2 removed any potentially unique or prejudicial
requirements that applied solely to Exec, and that all offerors must meet
the same security requirements. We agree with the agency.
The initial SFO stated that Executive Plaza would require modernization as
follows:
The Executive Boulevard Properties must undergo a complete modernization
to meet the requirements of the SFO. This must include a new building
fac,ade, new windows, and new mechanical and electrical systems. All
security requirements outlined in Section 9.0 of this SFO must also be
met.
SFO sect. 1.20(G).
This requirement was revised in SFO amendment No. 2 as follows:
Requirements of Modernization: the Executive Boulevard Properties must
meet all of the requirements of the SFO, including all security
requirements outlined in Section 9.0 of this SFO.
SFO amend. 2 at 1.
The agency argues that the revised provision merely states that Executive
Plaza must meet the requirements of SFO sect. 9.0, which apply equally to
all other offerors. The agency states that Exec must meet the security
requirements of SFO sect. 9, but is free to propose any manner of doing
so, and is not necessarily required to follow the modernization
requirements set forth in the initial SFO. Exec disagrees with this
interpretation, arguing that the agency should have deleted the provision
in its entirety. The protester argues that by specifically singling out
Exec, the SFO "confirms that there are a different set of requirements for
[Exec] than there are for all other offerors." Protester's Supp. Comments,
June 30, 2008, at 16.
We think that the protester's interpretation of the revised SFO provision
is unreasonable. While we agree that amended SFO sect. 1.20(G) is
duplicative in stating that Exec must meet the requirements of SFO sect.
9.0, there is no basis to conclude that the protester is being treated any
differently from other offerors. Specifically, there is no basis to
conclude that SFO sect. 1.20(G) relieves other offerors from the
requirements of SFO sect. 9.0, nor is there any basis to conclude that
additional requirements apply to Exec. On this basis, we find no merit to
the protester's argument.
Swing Space Requirement
Next, Exec argues that the swing space requirements are unduly restrictive
of competition because they apply only to incumbent lessors, and create
significant costs and burdens. The protester also argues that the
requirement for swing space is unreasonable because, it argues, Exec may
not be an incumbent lessor when the lease commences. The agency contends
that the swing space requirements are reasonable in light of the unique
status of the incumbent offeror, and that the agency expects to continue
occupying Executive Plaza until the new lease begins. As discussed below,
we find no merit to the protester's arguments.
The SFO requires the incumbent lessors to propose swing space, i.e.,
alternative office space, for NCI during the renovation of Executive
Plaza--which the SFO assumes will be required to meet the solicitation
requirements. SFO sect. 1.20(B). As relevant here, the swing space must be
provided at Exec's expense, while the government will continue to pay rent
on Executive Plaza during the relocation to the swing space. Id. para.
(D). In a move unique to incumbent lessors, the government will pay for
one move during the relocation of the office space--either to or from the
swing space; other moves, including reorganization of office space within
Executive Plaza during the renovation of those buildings, will be at
Exec's expense. Id. para. (E).
GSA acknowledges that the solicitation, by design, imposes a swing space
requirement solely on incumbent offerors. The agency argues that this
requirement is reasonable because the solicitation requires offerors to
propose the office space as a warm lit shell, and because Executive Plaza
will require renovation and demolition of existing tenant improvements. CO
Statement at 5. As a consequence of the demolition and renovation, NCI
employees must be moved during these events--to physically remove them
from the space as it is being renovated, and also to minimize disruption
to employees during the work. In essence, the agency argues that there is
no way to conduct the necessary renovation work with the employees
occupying the workplace. GSA further argues that the requirement for Exec
to pay for the swing space and certain moving costs is reasonable because
it allows the government to equalize the costs of incumbent and
non-incumbent offerors. The agency states that if an incumbent lessor were
not required to pay for swing space, the government would be subsidizing
the lessor's costs by paying for both the current space and the swing
space.
We think that a swing space requirement is an example of a legitimate
disadvantage faced by an incumbent lessor due to its circumstances, and is
not a disadvantage caused by unfair action by the agency. See Paramount
Group, supra. In this regard, requirements for swing space are the logical
consequences an incumbent lessor, such as Exec, must face when its
building must be renovated to meet new lease requirements. While we
recognize that potential non-incumbent lessors may receive a competitive
advantage by not having to address the need for swing space in their
offers, we think an agency is not required to remove the advantage unless
it results from preferential treatment or other improper actions by the
government. See, e.g., id. at 5; Norvar Health Servs.--Protest and Recon.,
B-286253.2 et al., Dec. 8, 2000, 2000 CPD para. 204 at 4-5.
Next, Exec argues that the requirement for swing space is unreasonable
because it is not clear that NCI will occupy the building after September
2009, when the current leases for Executive Plaza are due to expire. In
this regard, the SFO anticipates occupancy under the new lease between
August 2011 and February 2012, after the expiration of the current lease.
Thus, the protester argues, if NCI is not occupying Executive Plaza after
2009, Exec will not need to propose swing space. The protester also argues
that GSA has not clearly demonstrated that it will in fact use its
authority to extend the leases.
This argument raises two issues: (1) whether the agency has a reasonable
basis for extending the Executive Plaza leases, and (2) whether the agency
has the authority to extend the leases and will actually do so. First, GSA
states that it intends to extend the Executive Plaza leases, as it would
not be in the government's interest to move the NCI tenants from Executive
Plaza and the other buildings into a new building, and then move the
tenants again after the award of the new lease. Supp. AR, June 19, 2008,
at 11. The agency states that the costs and efforts of such a new
procurement, along with the tenant improvement and moving expenses cannot
be justified for such a short period of time. Supp. AR, attach. 1, J&A for
Lease Extension, at 3. On this record, we think that the agency's
rationale for continuing its occupancy of Executive Plaza for this period
is reasonable.
Second, GSA states that it has the legal authority to extend its leases at
Executive Plaza, either through negotiations with Exec, or condemnation
proceedings. In this regard, the GSA supplement to the Federal Acquisition
Regulation (GSAR) permits GSA to use other than competitive procedures to
extend the terms of a lease on a short-term basis for various reasons,
including the establishment of a common expiration date for multiple
leases. See GSAR sect. 570.405(c). GSA also argues that, in the event it
is unable to successfully negotiate lease extensions with Exec, the agency
has the legal authority to obtain a leasehold interest in Executive Plaza
through condemnation proceedings. See 40 U.S.C. sect. 581(c)(1) (stating
that the Administrator of GSA may "acquire, by purchase, condemnation, or
otherwise, real estate and interests in real estate."); 40 U.S.C. sect.
3113 ("An officer of the Federal Government authorized to acquire real
estate for the erection of a public building or for other public uses may
acquire the real estate for the Government by condemnation, under judicial
process, when the officer believes that it is necessary or advantageous to
the Government to do so."). Exec does not dispute that GSA has the
authority to negotiate an extension of the existing lease, award a new
short-term lease, or to condemn the property. Instead, the protester
argues that the agency has not taken the steps necessary in this process;
for example, the protester notes that GSA has not yet sought to engage in
negotiations regarding the extension of the leases.
Our review of the record shows that GSA's requirement for swing space is
based on its assumption that the Executive Plaza leases will be extended
beyond September 2009. We think the record here also shows that GSA has
the authority to extend the occupancy of NCI at Executive Plaza, either
through negotiation or unilateral condemnation actions. Furthermore, the
record shows that GSA has begun the process of extending the occupancy of
Executive Plaza by executing a J&A for other than full and open
competition. To the extent that the agency has not entered into
negotiations with Exec or taken all of the necessary actions needed to
extend NCI's occupancy at Executive Plaza, we accept GSA's representations
that it will do so between now and the September 2009 expiration of the
current leases. Thus, the record supports the agency's expectation that it
will occupy Executive Plaza through the new lease occupancy date, and that
the swing space will therefore be required if Executive is awarded the
lease. In sum, we find no basis to conclude that the swing space
requirement is unreasonable.[7]
Single Ownership Requirement
Finally, the protester argues that the requirement that the offered office
space be owned by a single entity is unreasonable.[8] The agency contends
that the requirement is a reasonable restriction that addresses concerns
regarding the current lease arrangements for NCI office space, which
involve [deleted] separate leases, and concerns regarding the future
administration of the lease.
As discussed above, the SFO states that"[t]he campus and/or buildings
offered must be one ownership and one single management group." SFO sect.
1.4. [Deleted]. The protester contends that because the office space will
be under a single manager, the fact that there are two separate leases
with the different owners will not affect the offerors' ability to meet
the solicitation requirements or affect the government's interests.
GSA argues that the requirement for single ownership is reasonable based
on two concerns. First, the agency notes that the current lease situation
for NCI involves [deleted] leases which results in "different rent rates,
in multiple buildings, owned by multiple landlords and operated by
multiple management companies." AR at 7. The agency states that it seeks
to avoid similar problems with the anticipated lease here by ensuring that
there will be a single owner and a single lease.
Second, the agency argues that the negotiation and administration of
multiple leases with multiple owners would be needlessly complicated
because of the fact that the government would need to reach separate
agreements with each lessor.[9] The agency also contends that the lease
schedule may be put at risk by disputes between multiple owners, and that
there is an increased risk of a delayed schedule because there will be
multiple entities responsible for obtaining financing and permitting.
Finally, the agency notes that the government's rights and remedies in the
event of nonperformance or breach become more difficult to enforce when
there are multiple lessors. For example, having multiple lessors could
require additional litigation by the government to determine how to
allocate responsibilities for delays or non-performance.
We think that the agency's concerns regarding multiple owners for the
proposed lease are reasonable. The agency explains that the numerous
problems posed by multiple leases stem from entering into leases with
multiple parties, each of whom would have separate legal rights and
obligations. For this reason, we think that the agency's concern that
single management will not address the problems posed by multiple owners
is reasonable. In sum, we think that GSA's requirement for single
ownership is reasonable.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Each of these evaluation factors contains several subfactors which are
not relevant to this protest.
[2] Exec also contends that GSA's amendment to the SFO, announced in the
agency's June 19, 2008 supplemental report on the protest, constituted
corrective action which entitled the protester to a reimbursement of the
costs of pursuing its initial protest. GSA does not agree that Exec is
entitled to protest costs, arguing that the record does not show that the
initial protest grounds were clearly meritorious. In this regard, our
Office will recommend that a protester be reimbursed its protest costs
only where, under the facts and circumstances of a given case, the agency
unduly delayed taking corrective action in the face of a clearly
meritorious protest, thereby causing a protester to expend unnecessary
time and resources to make further use of the protest process in order to
obtain relief. Advanced Envtl. Solutions, Inc.-Costs, B-296136.2, June 20,
2005, 2005 CPD para. 121 at 2-3. We have docketed this request as a
separate matter, and will address it separately.
[3] "Warm lit shell" is a common industry term, referring to basic
building structure elements. While the non-incumbent-specific SFO
provisions refer to a "building shell," and the incumbent-specific
provisions refer to a "warm lit shell," SFO sections 1.9, 1.20, GSA states
that for purposes of the SFO, the terms "building shell" and "warm lit
shell" are interchangeable. Supp. AR at 5. We think the record supports
this view, as SFO sect. 1.20 states that the incumbent offeror must
provide a "`warm lit shell' consistent with the definition of such in
Section 1.9 of this SFO." SFO sect. 1.20(C).
[4] As discussed above, NCI currently occupies four different buildings:
the two buildings comprising Executive Plaza, owned by the protester, and
the two owned by other offerors, 6116 Executive Plaza and 2115 East
Jefferson Street. The SFO refers to the incumbent lessors collectively as
the "Executive Boulevard Properties." The protester argues that the
incumbent-specific provisions of the solicitation are unduly restrictive
of competition; thus our discussion addresses these provisions as they
apply to Exec.
[5] The protester raises numerous collateral arguments in its protest that
we do not address here. For example, the protester argues that the
solicitation unreasonably requires incumbent offerors to submit a written
modernization plan to demonstrate how the incumbent lessor "proposes to
modernize the Executive Boulevard Properties in accordance with all of the
requirements of this SFO, including the requirements set forth in this
Section 1.20, with minimum disruption and interference with the ongoing
operations of the NIH." SFO sect. 1.20(F). As discussed below, we conclude
that the SFO requirements are reasonable regarding demolition of existing
tenant improvements and renovation and swing space. In light of these
requirements, we do not think that it is unreasonable for the incumbent to
provide a written overview of its plans to achieve the required
work--which other offerors will not need to perform. We have reviewed all
of the protest grounds raised by the protester and find that none has
merit.
[6] We also find no merit to the protester's argument that the
solicitation treats Exec differently from other offerors with regard to
the ability to receive a "credit" for existing tenant improvements that
the government may choose to accept, rather than require the lessor to
demolish, during negotiations concerning the tenant improvement allowance.
See SFO sections 1.9(A), 1.20(A), 1.11(A)(4). SFO amendment No. 2 imposes
identical requirements on all offerors to assume, for purposes of pricing
and structuring their offers, that demolition will be required. The SFO
provisions for incumbent and non-incumbent offerors also use identical
language to explain the process by which the lessor and the government may
agree, after award, that certain existing improvements would be counted as
a "credit" against the tenant improvement allowance. In this regard, the
term "notwithstanding" clearly distinguishes the assumptions offerors must
make in their proposals under SFO sections 1.9(A) and 1.20(A), from
negotiations that will take place after award regarding the government's
use of the tenant improvement allowance.
[7] Additionally, the agency argues that a GSAR provision, which was
incorporated into the SFO, permits offerors to submit alternative
proposals to the swing space requirement. See 48 C.F.R. sect.
552.270-1(c)(7). The protester argues that the ability to propose an
alternative to the swing space requirement is not a valid justification
for its restrictive effects, as submission of an alternative approach
places an offeror at risk of being rejected as unacceptable. Exec also
argues that this provision does not clearly allow it to propose
alternatives to the swing space requirement. Because, as discussed above,
we conclude the swing space requirement is reasonable, we need not address
whether the ability to propose alternative solutions to the swing space
requirement renders that requirement reasonable. Nonetheless, we agree
with the agency that the solicitation permits incumbent offerors to
propose alternatives to the swing space requirement. We note, however,
that a recent decision by the Court of Federal Claims expressed the
following view regarding the alternative proposal clause: "While GSAR
552.270-1(c)(7) allows offerors to submit proposals that depart materially
from solicitation requirements, the government has no obligation to
consider them, or explain why it did not do so." Tim Mills Props., Inc. v.
United States, Fed. Cl. No. 08-375C, July 15, 2008, at 14-15.
[8] The protester initially argued that the requirement for single
management was unduly restrictive of competition, but now concedes that
the agency's requirement is reasonable. Protest at 11; Protester's
Comments, June 9, 2008, at 5.
[9] Exec notes that GSA's concerns are expressed with regard to multiple
leases, rather than the SFO's requirement for a single owner. The
protester does not explain, however, the relevance of this distinction to
its protest. In this regard, the record shows that the protester's
approach does not or will not involve either single ownership or a single
lease.