Jones, Russotto & Walker, B-283288.2, December 17, 1999

B-283288.2 Dec 17, 1999 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A firm protested a Department of Housing and Urban Development (HUD) solicitation for real estate closing services, contending that: (1) HUD should have exercised its contract option instead of conducting competitive procurement; (2) the solicitation did not present adequate information to permit bidders to compete; and (3) the solicitation estimates for the number of anticipated real estate closings were inaccurate. GAO held that: (1) the decision whether or not to exercise a contract option was a matter of contract administration; (2) the solicitation provided sufficiently detailed information on HUD's requirements to enable bidders to intelligently prepare a bid; and (3) the estimates were based on the best information reasonably available to HUD. Accordingly, the protest was denied. View Decision Matter of: Jones, Russotto & Walker File: B-283288.2 Date: December 17, 1999 DIGEST Attorneys DECISION Jones, Russotto & Walker (Jones) protests the terms of invitation for bids (IFB) No. B-PHI-00419, issued by the Department of Housing and Urban Development (HUD) for real estate closing services in connection with the sale of single-family properties owned by HUD within Virginia. /1/ Jones, an incumbent contractor, has raised a variety of objections to the IFB. The crux of Jones's protest is that the new solicitation allegedly reflects the agency's improper determination not to exercise the remaining options under the predecessor contract. Jones's objections to the current IFB largely reflect its view that HUD's failure to exercise the option under Jones's contract is designed to "terminate prematurely without cause" the closing services that Jones is performing under a contract that it was "led by HUD to believe . . . would be renewed annually through October 31, 2001." Protest at 1. Jones takes the position that the terms of the extant contract should remain unchanged, and alleges that the solicitation is defective because the information provided in the IFB is not adequate to permit competition on an equal basis, the agency unreasonably divided the state into six geographic service areas, and the estimates of the total number of expected closings and the expected closings in each area are so unrealistic as to prohibit the submission of meaningful bids. We deny the protest. The IFB, issued on June 30, 1999, as a small business set-aside, provides for the award of up to six fixed-price, indefinite-quantity contracts, one for each of six geographic service areas, for a base year with two 1-year options. IFB amend. 5, Sec. B-8. Each successful bidder is to close, within its geographic service area, any sales transaction assigned to it by HUD's management and marketing (M&M) contractor. /2/ The six geographic service areas initially outlined in the original IFB at section B-1 were identical to those specified under the current contracts. These geographic areas were redefined in amendment 3 at section B-1. The solicitation maintained the same number of geographic areas, and the redefined areas were not named, but simply numbered with the IFB listing the counties and the independent cities included in each area. Amendment 3 also included a map of Virginia, which showed each county and outlined and numbered each of the six redefined areas. The prices paid per closing under current contracts for the geographic service areas delineated under the prior solicitation were also provided in the solicitation. IFB amend. 3, Cover Page. The amendment stated that the six areas under the current contracts do not correspond to the redefined areas under this IFB. Id. At section C, the IFB contained a 10-page statement of work (SOW) which outlined the work to be performed and the time frames. The SOW required contractors to provide the necessary services, personnel, equipment and material to, among other things, establish and maintain case files, conduct for each property a "lien and judgment" full title search covering the preceding 10 years, and obtain and maintain files of homeowner association and condominium documents. IFB amend. 3, Sec. C-3. The SOW required contractors to conduct all closings in person with the purchaser or the purchaser's representative, id. Sec. C-2(b), to ensure accurate payment of all closing costs within 3 to 5 business days of the closing, id. Sec. C-2(c)(2), and to deliver a complete closing package to HUD within 2 business days of closing. Id. Sec. C-2(c)(4). The solicitation also required the HUD contractor to be physically present at all closings being conducted by a third party and provided that the contractor would receive only 50 percent of its fixed unit price for third-party closings. /3/ IFB amend. 5, Sec. B-8(b).