The Price Was Not Right - Resulting Award Decision Therefore Unreasonable
GAO sustained a protest by Fedcar Company, Ltd (“Fedcar”) of the General Services Administration’s (“GSA’s”) award to Duke Realty Limited Partnership (“Duke”) of a 15-year contract for the construction and lease of a “fully-serviced FBI campus facility.” GAO held that GSA’s source selection decision was not reasonable because it used an incorrect calculation to determine Duke’s price. GAO also held that the evaluation of the relative merits of the proposals was insufficiently documented.
Agency Evaluation Unreasonable When Based On An Incorrect Calculation
Fedcar protested that GSA’s price evaluation was unreasonable because it was based on an incorrect calculation. The solicitation stated that offerors’ price would be “evaluated based upon the ‘present value’ ANSI/BOMA [American National Standards Institute/Building Owners and Managers] office area per square foot cost of the offers.” The ANSI/BOMA international standard for office area was defined by the solicitation as “the area where a tenant normally houses personnel and/or furniture, for which a measurement is to be computed.” Fedcar alleged that in determining Duke’s present value ANSI/BOMA, GSA inserted incorrect numbers into the price evaluation spreadsheet and that this error favored Duke.
GSA admitted the error but asserted that the error did not prejudice Fedcar, arguing that it was inconsequential and that the outcome of the award process would be the same regardless of Fedcar’s increased price advantage resulting from use of the correct pricing figures. GAO disagreed, noting that GSA’s rationalization of the error as inconsequential was made in the heat of litigation, and that because the solicitation stated that price could become more important if proposals were technically closely evaluated, the procurement could, in fact, have ended with award to Fedcar. GAO added, “Where a source selection authority bases his or her source selection decision on figures that do not reasonably represent the differences in costs to be incurred under competing proposals, the source selection decision is not reasonably based.”
Documentation Of Award Decision Deficient
GAO also found that GSA’s evaluation was not reasonably justified because it did not compare the differences in the relative strengths and weaknesses between the proposals of Fedcar and Duke. While the source selection decision document addressed Duke’s strengths, it did not address Duke’s weaknesses, nor Fedcar’s strengths and weaknesses. GSA’s failure to document any consideration of the proposals’ relative merits was not sufficient to support award to Duke.
Timeliness And Standing As Intervenor In Previous Protest
An interesting side note to this protest is that GSA and Duke (as an intervenor in the protest) argued that Fedcar’s protest was untimely. Because Duke had earlier protested a previous award to a third offeror, GSA and Duke argued that Fedcar had the responsibility to diligently pursue its grounds of protest by intervening in the earlier protest. Fedcar’s failure to do so and the resulting failure to obtain information relating to its grounds of protest, argued GSA and Duke, meant the Fedcar’s protest was now untimely. GAO points out in a footnote in the decision that the definition of “intervenor” as “an awardee if an award has been made” under GAO’s Bid Protest Regulations precluded Fedcar from intervening in Duke’s earlier protest. 4 C.F.R. § 21.0(b)(1). Fedcar’s protest, filed within 10 days of notification of award to Duke, was therefore timely.
Effect Of No Termination For Convenience Clause; But Counteroffer, Not Acceptance
Another interesting aspect of GAO’s decision was its approach to the lack of a Termination for Convenience clause in Duke’s lease contract. Customarily, according to the decision, GAO will determine that remedial action disturbing the award of a contract lacking a Termination for Convenience clause is “not feasible.” However, in awarding the contract to Duke, GSA did not unconditionally accept Duke’s offer. Instead, GSA notified Duke that it had received award and simultaneously provided a draft lease to Duke that contained changes from the terms of the solicitation and Duke’s offer. GAO found that these changes were material. Therefore, GSA never unconditionally accepted Duke’s offer an thus a contract was never formed; rather, GSA’s draft lease was a proposed counteroffer to Duke.
Fedcar Company, LLC, B-310980, B-310980.2, B-310980.3, Mar. 25, 2008, 2008 CPD 70.
