LCPP, LLC

B-413513.2 Mar 10, 2017 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights LCPP, LLC, of Gainesville, Florida, protests the terms of request for lease proposals (RLP) No. VA248-16-R-0633, issued by the Department of Veterans Affairs (VA) for leased administrative office space in Lake City, Florida. LCPP, the incumbent lessor, argues that the RLP's fixed tenant improvement allowance undermines the competitive process and is prejudicial to offerors who could accomplish the tenant improvements for less than the mandated amount. LCPP also asserts that the agency failed to include a present value price evaluation in the solicitation. We deny the protest. We deny the protest. View Decision 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:  LCPP, LLC File:  B-413513.2 Date:  March 10, 2017 Robert C. MacKichan, Jr., Esq., Gordon Griffin, Esq., and Mary Beth Bosco, Esq., Holland & Knight, LLP, for the protester. Harold W. Askins III, Esq., Department of Veterans Affairs, for the agency. Nora K. Adkins, Esq., and Amy B. Pereira, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest of request for lease proposals’ price provisions is denied where the protester has not demonstrated that the provisions violate applicable procurement laws and regulations and the provisions are otherwise unobjectionable. DECISION LCPP, LLC, of Gainesville, Florida, protests the terms of request for lease proposals (RLP) No. VA248-16-R-0633, issued by the Department of Veterans Affairs (VA) for leased administrative office space in Lake City, Florida.  LCPP, the incumbent lessor, argues that the RLP’s fixed tenant improvement allowance undermines the competitive process and is prejudicial to offerors who could accomplish the tenant improvements for less than the mandated amount.  LCPP also asserts that the agency failed to include a present value price evaluation in the solicitation. We deny the protest. BACKGROUND On June 3, 2016, the VA issued the RLP for the lease of 9,000 net usable square feet (NUSF) of administrative/office space in Lake City, Florida.  RLP at 4.  The RLP contemplated the award of a 10-year lease on a best-value tradeoff basis based upon the agency’s evaluation of the following four factors:  technical (quality of location and quality of building/layout design); technical risk; past performance; and price.  Id. at 4, 17.  The solicitation advised that the non-price factors, when combined, were significantly more important than price.  Id. at 17. At issue in this protest are certain RLP price provisions addressing the tenant improvement allowance (TIA) and the present value price evaluation.  With respect to the TIA, amendment eight to the RLP described tenant improvements (TIs) as “the finishes and fixtures that typically take [s]pace from the shell condition to a finished, usable condition,” and provided the offerors with a fixed TIA of $115.45 per NUSF.  RLP amend. No. 8, at 3.  Offerors were to include the fixed TIA as a component of the proposed rental rate.  Id. With respect to the price evaluation, the solicitation required offerors to submit various pricing information in forms included as attachments to the RLP.  RLP at 12.  The lessor’s annual cost statement form requested such information as the offeror’s annual cost of services and utilities (cleaning/janitorial service, heating, electrical, plumbing, air conditioning, elevators, and other miscellaneous costs), as well as, the annual cost of ownership (real estate taxes, insurance, building maintenance and reserves, lease commission, and management).  RLP amend. No. 6, at 101-2.  The proposal to lease space form requested such information as the initial term shell rate, the initial term operating costs, and the total NUSF rate per year.  Id. at 103-4. The solicitation stated that the agency would evaluate offerors’ prices by analyzing the individual elements of the proposed rent such as the base rental rate, operating cost rate, and shell rate submitted by each offeror and compare them against the NUSF.  RLP amend. No. 8, at 5.  The RLP also provided that the TIA would be used in calculating pricing scenarios over the 10‑year period in order to compare the total lease rental rates.  Id.  The amendment additionally provided various examples to demonstrate how the agency’s price evaluation would arrive at the total price for purposes of evaluation by applying the TIA to the base rent, operating costs, escalation, and buildout costs.  Id.