1301 New York Avenue Associates

1301 New York Avenue Associates BNUMBER: B-274676.2; B-274676.3 DATE: January 8, 1997 TITLE: 1301 New York Avenue Associates ********************************************************************** DOCUMENT FOR PUBLIC RELEASE A protected decision was issued on the date below and was subject to a GAO Protective Order. This version has been redacted or approved by the parties involved for public release. Matter of:1301 New York Avenue Associates File: B-274676.2; B-274676.3 Date:January 8, 1997 Douglas L. Patin, Esq., Catherine R. Baumer, Esq., and Robert J. Symon, Esq., Spriggs & Hollingsworth, for the protester. Richard J. Conway, Esq., and Karen Lau, Esq., Dickstein Shapiro Morin & Oshinsky, for Square 140 Associates, an intervenor. Barry D. Segal, Esq., and Jeffrey M. Hysen, Esq., General Services Administration, for the agency. Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency improperly evaluated the protester's best and final offer for the lease of office space is denied where the record shows that the agency's evaluation of the protester's rental rate that included required tenant alterations was reasonable notwithstanding the protester's expectation that its lower rate which excluded these alterations would be used for evaluation purposes. DECISION 1301 New York Avenue Associates Limited Partnership protests the award of a contract to Square 140 Associates under solicitation for offers (SFO) No. 96-012, issued by the General Services Administration (GSA) for the lease of approximately 167,000 to 177,000 occupiable square feet (osf)[1] of office and related space in Washington, D.C. for use by the Department of Agriculture's Economic Research Service (ERS). The protester argues that the evaluation of its offer and that of the awardee was unreasonable in several specific areas. We deny the protests. The amended SFO solicited offers for a 5-year base period with a 5-year renewal option and a 10-year firm lease term. Among other things, the SFO stated that award would be made to the lowest-priced offeror whose proposed space conforms to the requirements of the SFO. It also stated that price evaluation would be based on the "net present value" of the annual rent per osf and explained how that figure would be calculated for price evaluation purposes. In this regard, paragraph 1.9 of the SFO entitled, "Price Evaluation (Present Value)" reads, in pertinent part: "Evaluation of offers will be on the basis of the total annual present value per occupiable square foot including any option periods and concessions. The Government will make independent present value price evaluations on the five year firm term with five year option and the ten year firm term The government reserves the right to make an award based upon either term." (Emphasis in original.) . . . . . "The Government will make present value price evaluation by reducing the prices offered to a total annual present value price per occupiable square foot, as follows: (D) In the event the government competes an expiring lease for the possibility of relocation, the cost per occupiable square foot for relocation expenses shall be added to the total price per occupiable square foot of all offers with the exception of the offer submitted for the existing leased facility. Such relocation costs may include but are not limited to physical move costs, telecommunication costs, alterations cost and the estimated cost of agency disruption. The sum of the total present value price per occupiable square foot and the relocation cost per occupiable square will be the basis for price evaluation in determining if the Government shall relocate." (Emphasis in original). Offers were received from nine firms in response to the SFO. 1301 New York Avenue, the incumbent lessor, offered the existing building which it has leased to GSA for 11 years on an "as is" basis, while Square 140 offered a building located at 1800 M Street in Northwest Washington, D.C. During discussions, each offeror was advised that the tenant agency's needs included kitchenettes (the SFO was silent on this feature). The protester was specifically advised of this requirement as well as others that would require modifications to the existing occupied space. Best and final offers (BAFOs) were received by June 21. In its BAFO, 1301 New York Avenue submitted two rates: a base rental of [deleted], which did not include the required tenant alterations and [deleted] which did include the alterations which the protester identified in its cover letter as: "1. The entire premises will be painted. "2.