Property at 4545 Montgomery, LLC (RLP-57-291)

B-420006 Oct 12, 2021 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Property at 4545 Montgomery Avenue, of Cincinnati, Ohio, protests the award of a lease to Scott Rasa, of Higginsville, Missouri, under request for lease proposals (RLP) No. 57-29107-20-FA, issued by the Department of Agriculture. Property at 4545 asserts that the agency unreasonably rejected its proposal, and failed to engage in meaningful discussions. We deny the protest. View Decision Decision Matter of:  Property at 4545 Montgomery, LLC File:  B-420006 Date:  October 12, 2021 Dr. Paul Sohi, Property at 4545 Montgomery, LLC, for the protester. Adam Humphries, Esq., Department of Agriculture, for the agency. Mary G. Curcio, Esq., and John Sorrenti, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency unreasonably rejected lease proposal is denied where protester proposed reimbursement of tenant improvement costs as a lump sum payment, and the solicitation stated that tenant improvement costs should be amortized and any lump sum payments for these costs were solely at the discretion of the government.  DECISION Property at 4545 Montgomery Avenue, of Cincinnati, Ohio, protests the award of a lease to Scott Rasa, of Higginsville, Missouri, under request for lease proposals (RLP) No. 57-29107-20-FA, issued by the Department of Agriculture.  Property at 4545 asserts that the agency unreasonably rejected its proposal, and failed to engage in meaningful discussions.    We deny the protest BACKGROUND The RLP, issued on February 12, 2020, provided that the lease would be awarded to the offeror that submitted the lowest-priced, technically acceptable offer, with a price that qualifies as an operating lease under Office of Management and Budget (OMB) guidance.[1]  The RLP was comprised of 15 documents, including form L100, the lease template.  Offers were due on April 20. As relevant to this protest, offerors were required to make certain tenant improvements for which the offeror would be reimbursed.  The RLP required offerors to include the annual rent to amortize the tenant improvements in its price proposal for purposes of reimbursement.  Agency Report (AR), RLP § 3.03.[2]  The lease template required offerors to indicate the amount of the rent included for tenant improvements, the rate of amortization, and the period over which the payments would be amortized.  AR, Lease Template § 1.03.  The lease template also included the following with respect to reimbursement for tenant improvements: A.  The Lessor has agreed to total [tenant improvement] pricing of $X. . . . This amount is amortized in the rent over the Firm Term of this Lease at an interest rate of X percent per year. *  *  * C.  The Government may elect to make lump sum payments for any or all work covered by the [tenant improvements]. . . .  At any time after occupancy and during the Full Term of the Lease, the Government, at its sole discretion, may elect to pay lump sum for any part or all of the remaining unpaid amortized balance of the tenant improvements. *  *  * AR, Lease Template § 1.08.  Three offerors responded to the solicitation.[3]  The agency evaluated the proposals and held two rounds of discussions.  After each round of discussions the agency received and evaluated revised proposals.  MOL at 3.  In its initial proposal, and each of its revised proposals, Property at 4545 amortized the cost of tenant improvements.  Contracting Officer’s Statement (COS) at 2.  On February 10, the agency requested the offerors submit final proposal revisions (FPRs) by February 17.  Id.