Leasing office space in a flood plain seems like a bad idea. Most people want an office with a view, but not a view of their office desk floating down a first-floor hallway. In a recent protest decision, GAO said that the agency failed to adequately document its evaluation, despite its own solicitation requirements.
But even when your protest is sustained, GAO may still recommend the award remain in place. How can that be? Follow along, while I lead you through what you need to know.
The GAO’s decision in Public Properties, LLC, B-419414.2 (2021) involved GSA Request for Lease Proposals (“RLP”) for office space in Carson City, Nevada. The RLP sought to make award of a 20-year lease for office space. The RLP sought approximately 27,000 square feet of space, and 75 exterior parking spaces for two tenants. The RLP anticipated award utilizing a lowest-price, technically acceptable proposal evaluation.
The GSA ultimately received two proposals for consideration. After discussions with the offerors, GSA received final proposals. GSA determined both Public Properties, LLC (Protester) and PMMC submitted technically acceptable proposals. GSA made award to PMMC as the lowest-priced, technically acceptable proposal at approximately $14.8 million for the full 20-year lease. Following this decision, Protester requested debriefing, and ultimately filed its protest with GAO.
The Protester contended GSA should have found PMMC’s proposal technically unacceptable or ineligible because PMMC’s proposed site lies in a 100-year floodplain. Additionally, Protester argued that GSA failed to adequately document its technical evaluation. Based upon these alleged failures, the resulting evaluations were flawed and the award should be tossed out.
As readers of this blog know, GAO does not reevaluate submissions, but will “examine the supporting record to determine whether the decision was reasonable, consistent with the stated evaluation criteria, and adequately documented.” In other words, GAO will not step on the toes of an agency unless the record developed does not support, or is inconsistent with, the agency’s version of facts.
GAO issued a scathing review of the GSA’s technical evaluation in this matter. Protester argued PMMC’s property lies within a 100-year flood plain, and the RLP prohibited award to such a property. Protester’s property did not lie on a 100-year flood plain. GSA responded, arguing it determined the portion of land to be used for the office space did not lie on the 100-year flood plain, only another small part not to be used did. GAO said it would have found this reason acceptable, but the record contained an incomplete record as to how it got to that reasoning.
GAO did not find GSA’s post-protest explanations persuasive. Specifically, the record established only the later post-award analysis referred to the 100-year floodplain. GAO found no support for GSA’s contention it assessed the potential impacts from a portion of the land lying on a 100-year floodplain. Seemingly, GAO wanted to agree with GSA, but hammered the lack of any contemporaneous record for its decision. Much like in math class back in grade school, failing to document your work proved a fatal flaw to GSA. GAO, on this point alone stated, “we find that the record here is insufficient for us to conclude that the agency’s evaluation of the awardee’s proposal as technically acceptable was reasonable, and we sustain the protest on this basis.”
GAO then turned to the technical evaluation of the offerors. Again, GAO does not pull its punches, hammering GSA for its lack of supporting documentation. As an attorney, I winced at the language GAO used.
“The record is wholly devoid, however, of any explanation of how or why the agency reached these conclusions, and is bereft of any assessment of whether offerors’ proposals met the above-listed, and numerous other, solicitation requirements.”
The agency contended its award decision was well-documented, GAO clearly disagreed. Other than flood, fire, and seismic safety reviews, GSA provided virtually no contemporaneous evaluation of the offerors proposals on numerous other requirements. In reaching this conclusion, GAO found no basis for how GSA determined either proposal technically acceptable. Accordingly, GAO sustained the protest on this ground as well.
The key takeaway is an agency must adequately document its decision-making process. Importantly, post-protest documentation is only given serious consideration when there exists pre-protest documentation on the subject. Although PMMC’s project may very well have had the most advantageous proposal, GSA’s failure to show how it determined so, was the fatal flaw.
Here is where insult is added to injury for the Protester: GAO did not recommend the agency invalidate the award. Given the scathing rebuke of the GSA, I expected an equally scathing recommendation. GAO found the agency and PMMC already signed the lease, and the lease did not contain a standard termination for convenience clause. The lease only permitted the agency to terminate the contract after a 10-year fixed term. GAO reasoned, “[i]n the absence of a termination for convenience clause, we ordinarily do not recommend termination of an awarded lease, even if we sustain the protest and find the award improper.”
Protester will likely be reimbursed its proposal preparation costs, as well as costs associated with the protest. But resolution of protests involving leases without termination for convenience clauses could leave protesters with a limited remedy, at least at GAO.
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