Paramount Group, Inc.
Highlights
Paramount Group, Inc. protests the terms of solicitation for offers (SFO) No. 06-011, issued by the General Services Administration (GSA) for the lease of office space to be occupied by the Department of Homeland Security (DHS), Immigration and Customs Enforcement Agency (ICE). The protester contends that the solicitation is unduly restrictive of competition.
B-298082, Paramount Group, Inc., June 15, 2006
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: Paramount Group, Inc.
Kevin P. Mullen, Esq., and David E. Fletcher, Esq., DLA Piper Rudnick Gray Cary LLP, for the protester.
Robert C. MacKichan, Jr., Esq., Stuart W. Turner, Esq., and Kristen E. Ittig, Esq., Holland & Knight LLP, for Bristol Group, an intervenor.
Edith Toms, Esq., and Elizabeth A. Hall, Esq., General Services Administration, for the agency.
Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest challenging solicitation's terms as unduly restrictive of competition is denied where agency demonstrates a reasonable basis for required approach to lease of office space and information provided in the solicitation is adequate to allow for submission of offers.
DECISION
Paramount Group, Inc. protests the terms of solicitation for offers (SFO) No. 06-011, issued by the General Services Administration (GSA) for the lease of office space to be occupied by the Department of Homeland Security (DHS), Immigration and Customs Enforcement Agency (ICE). The protester contends that the solicitation is unduly restrictive of competition.
BACKGROUND
The SFO seeks offers for the lease by GSA of up to 403,847 square feet of office space in
The SFO states that offers will be evaluated on the basis of three non-price technical factors, in descending order of importance: building characteristics, location, and key personnel and past performance. 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.
The SFO requires offerors to propose office space located within specified boundary areas in
Base structure and building enclosure components shall be complete. All common areas accessible by the Government, such as lobbies, fire egress corridors and stairwells, elevators, garages, and service areas, shall be complete. Restrooms shall be complete and operational. All newly installed building shell components, including but not limited to heating, ventilation, and air conditioning (HVAC), electrical, ceilings, sprinklers, etc., shall be furnished, installed, and coordinated with Tenant Improvements.
SFO sect. 1.9.A.1.
In their offers for the warm lit shell, offerors must propose a basic price per square foot for space, with an allowance for tenant improvements. This allowance is an established rate of $38.30 per square foot set by the SFO for all offerors, and will be used by the lessor to build the tenant improvements, as directed by the agency, prior to occupancy. SFO sections 1.10, 1.15; Supplemental Agency Memorandum of Law at 6-7. Based on the initial offers for the warm lit shell, GSA will select offerors for a competitive range. SFO sect. 1.8(B)(2).
In the second phase of the competition, offerors selected for the competitive range will be provided additional information, including the program of requirements (POR), and will be required to conduct test fits of their space to determine which offeror provides the most efficient utilization of space for the government's needs.
The SFO also contains provisions that apply only to
WARM LIT SHELL REQUIREMENT
The protester contends that the warm lit shell requirement and the Renovation of Current Location Alternative provisions place it at a competitive disadvantage. The protester argues that the agency has not reasonably justified its requirement for a warm lit shell in a way that should require
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,
The agency cites two primary rationales for its requirement for a warm lit shell: flexibility for GSA client agencies and facilitation of evaluation of competing offers. With regard to the first rationale, the agency explains that a warm lit shell standard provides relatively uniform office space that allows GSA client agencies, such as ICE, to focus their design efforts on their individual adjacency requirements and on other interior layout requirements, rather then redesign, from scratch, the MEP [mechanical, electrical, plumbing] systems, the common areas, standard finishes, any fire and life safety related systems, etc. Supplemental Agency Memorandum of Law at 4. The warm lit shell also provides a standard level of quality that allows agencies to know[] generally what to expect in the way of minimum quality standards in a Government leased location. Declaration of GSA Senior Realty Specialist para. 6. The agency states that the warm lit shell approach is the only method of obtaining space that will permit ICE to actually design its interiors around its own operational needs so that it functions in accordance with its own mission, as opposed to functioning around the incumbent's constraints. Supplemental Agency Memorandum of Law at 5. In this regard, the agency explains that because ICE is comprised of portions of numerous predecessor agencies, it now requires the flexibility to reorganize the agency in new office space configurations. Contracting Officer's Statement paras. 4, 8-9.
With regard to the second rationale, the agency explains that GSA's adoption of the warm lit shell standard stems from the agency's efforts in the early 1990s to bring the government's leasing practices in line with commercial practices, with the goal of attracting increased competition from potential commercial offerors. Declaration of GSA Senior Realty Specialist para. 5. The agency contends that requiring all offerors to offer a basic warm lit shell, without tenant improvements such as completed interior office space construction, allows the agency to more easily compare offers: By requiring a uniform 'warm, lit shell' and a uniform Tenant Improvement allowance (set based on individual tenant needs for a given procurement), it is very easy to price compare between offers in a procurement.
We believe that the agency has reasonably explained the basis for requiring offerors to provide a warm lit shell. Although the protester contends that it may be able to provide a more efficient or less costly alternative to the warm lit shell requirement, the agency need only provide a reasonable basis for its procurement approach, and the protester's mere disagreement with the agency's solicitation approach does not render the agency's judgment unreasonable.[2] USA Fabrics, supra, at 5.
In any event, the government is 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,
In sum, because the agency has demonstrated a reasonable basis for requiring offerors to propose a warm lit shell, and because the protester does not demonstrate that any competitive disadvantage it might incur is based on unfair government action, we deny this ground of protest.[4]
POR DISCLOSURE
The protester next argues that the agency unreasonably withheld the POR from offerors, and that
The agency contends that offerors do not need the POR to be able to submit their offers, stating that the SFO contain[s] detailed construction specifications for the base building and certain generic aspects of the tenant improvements, as well as detailed criteria for the evaluation of the quality of the building architecture, systems, and construction. Contracting Officer's Statement at 6. The POR, in contrast, provides some, although not all, of the specifications for the actual tenant improvements, such as office space layout and configuration. Contracting Officer's Statement at 6-7. With regard to the SFO provisions that apply to the renovation of the CAB, the agency also states that there is sufficient information for the protester to submit an offer:
The SFO contains all of the information needed for Paramount to develop a plan for the renovation and re-positioning of the base building to meet the minimum requirements of the SFO and to improve the competitive standing of the building in the procurement, as well as to develop a plan for the relocation of a portion of the building occupants into temporary swing space and for the phasing of tenant improvement construction.
Contracting Officer's Statement at 6-7.
Thus, the agency argues, because offerors will be evaluated in the first stage of the procurement based on their offers for the warm lit shell in accordance with the information contained in the SFO, there is no need for offerors to have access to the POR. Furthermore, the agency notes that offerors do not need access to the POR to determine their proposed prices because the lease rate must be based solely on the warm lit shell, and all offerors are required to include the same tenant improvement allowance. SFO sections 1.10, 1.15; Supplemental Agency Memorandum of Law at 6-7.
Although offerors are required to describe their general approach to providing the completed office space, and the CAB renovation requirements impose additional requirements for Paramount, we believe that it is speculative at this point to conclude that Paramount might be evaluated based on information that could not have been known without the POR (e.g., downgraded for insufficiently detailing the completed office space or phasing of swing space and tenant improvements). The agency has not conducted its evaluation of offers or indicated that the protester's offer will not be included in the competitive range or otherwise excluded from award consideration; thus its protest merely anticipates prejudicial agency action and is, therefore, speculative and premature. See Computer Assoc. Int'l, Inc., B-292077.2,
The protest is denied.
Anthony H. Gamboa
General Counsel
[1] ICE is the DHS agency with responsibility for investigating threats to border security, and for enforcing economic, transportation, and infrastructure security laws and regulations. Prior to the creation of DHS, the CAB was occupied by one of ICE's predecessor agencies, the Immigration and Naturalization Service (INS). In 2003, INS and other agencies were reorganized and consolidated into ICE, which assumed INS's office space at the CAB.
[2]
[3] In HG Properties, our Office concluded that an SFO for leased property did not unduly restrict competition merely because it had some provisions favoring award to offerors who proposed new construction where the agency justified its preference for new construction, and the SFO did not preclude the protester, the incumbent lessor, from offering its existing property; the fact that the property owned by the incumbent lessor would require additional work to meet the agency's requirements did not mean that the SFO was unduly restrictive of competition. HG Props. A, L.P., supra, at 4-5.
[4] Although