TITLE: B-311314.2, Trammell Crow Company, June 20, 2008
BNUMBER: B-311314.2
DATE: June 20, 2008
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B-311314.2, Trammell Crow Company, June 20, 2008
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: Trammell Crow Company
File: B-311314.2
Date: June 20, 2008
Ronald A. Schechter, Esq., Gary E. Humes, Esq., Kara L. Daniels, Esq.,
Stuart W. Turner, Esq., and Patricia L. Stasco, Esq., Arnold & Porter, for
the protester.
Fernand A. Lavallee, Esq., Jeffrey R. Keitelman, Esq., J. Phillip
Ludvigson, Esq., and Kim K.S. Pagotto, Esq., DLA Piper, for the
intervenor.
Elizabeth A. Hall, Esq., General Services Administration, for the agency.
Peter D. Verchinski, Esq., David A. Ashen, Esq., and John M. Melody, Esq.,
Office of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
1. Protest is sustained where agency improperly credited awardee's
proposed building with availability of certain future amenities; while
solicitation required third party evidence that amenities "will exist" by
date of occupancy, awardee only provided in its proposal its own
commitment that it would provide the amenities in its building by
occupancy date.
2. Protest that agency failed to engage in meaningful discussions with the
protester is sustained where agency failed to raise significant weaknesses
associated with protester's key personnel during discussions.
DECISION
Trammell Crow Company (TCC) protests the General Services Administration's
(GSA) award of a lease to CS Master V, LLC (Stonebridge), under
solicitation for offers (SFO) No. 07-018, for office and related space to
be occupied by the Department of Justice (DOJ) in Washington, D.C. TCC
alleges several evaluation and other improprieties in the procurement.
We sustain the protest.
The solicitation, which anticipated the award of a 15-year lease, provided
for a "best value" award based on four evaluation factors (with
subfactors): location (access to DOJ facilities; access to Metrorail; and
access to amenities); building characteristics (quality of building
architecture, building systems, construction, and finishes; planning
efficiency and flexibility; and access to natural light); key personnel
and past performance (key personnel and past performance); and price.
Agency Report (AR) , Tab 5, SFO, at 20-21. The location factor was
approximately equal in importance to the building characteristics factor,
and each was significantly more important than key personnel/past
performance; the technical factors combined were significantly more
important than price. Id. In addition, the SFO stated that the phased
occupancy of the building was to begin no earlier than January 1, 2010,
and was to be completed no later than June 30, 2010. Id. at 8.
Following the submission and evaluation of initial offers, a round of
discussions, and the submission and evaluation of final offers,
Stonebridge's offer was among the highest rated (overall rating of highly
successful plus) and offered the lowest price (annual present value
[DELETED] per square foot), while TCC's offer was both lower rated
(overall rating of successful plus) and higher priced ([DELETED] per
square foot, for a total price premium of $16.6 million on a net present
value basis). AR, Tab 24, at 42, 43. The final evaluation ratings were as
follows:[1]
+------------------------------------------------------------------------+
|Factor |Subfactor |TCC |Stonebridge |
|----------------+---------------------+-----------------+---------------|
|Location |Access to DOJ |Superior Minus |Successful Plus|
| | | | |
|(45%) |(20%) | | |
| |---------------------+-----------------+---------------|
| |Access to Metro |Highly Successful|Highly |
| | | |Successful |
| |(15%) | | |
| |---------------------+-----------------+---------------|
| |Access to Amenities |Highly Successful|Highly |
| | |Minus |Successful |
| |(10%) | | |
| |---------------------+-----------------+---------------|
| |FACTOR RATING |Highly Successful|Highly |
| | | |Successful |
| | | |Minus |
|----------------+---------------------+-----------------+---------------|
|Building |Quality of Building/ |Successful |Superior |
|Characteristics |Architecture (20%) | | |
| |---------------------+-----------------+---------------|
|(45%) |Planning Efficiency/ |Marginal |Highly |
| |Flexibility (20%) | |Successful |
| |---------------------+-----------------+---------------|
| |Access to Light (5%) |Highly Successful|Superior |
| |---------------------+-----------------+---------------|
| |FACTOR RATING |Successful Minus |Superior Minus |
|----------------+---------------------+-----------------+---------------|
|Key Personnel/ |Key Personnel (5%) |Successful |Superior |
|Past Performance|---------------------+-----------------+---------------|
| |Past Performance |Highly Successful|Successful |
|(10%) | | | |
| |(5%) | | |
| |---------------------+-----------------+---------------|
| |FACTOR RATING |Successful/Highly|Highly |
| | |Successful |Successful |
|--------------------------------------+-----------------+---------------|
|OVERALL RATING |SUCCESSFUL PLUS |HIGHLY |
| | |SUCCESSFUL PLUS|
+------------------------------------------------------------------------+
AR, Tab 23, at 1. Stonebridge's offer was selected as the best value to
the government, and this protest followed.[2]
TCC raises numerous arguments concerning the propriety of the evaluation
and other aspects of the procurement. In reviewing protests of alleged
improper evaluations and source selection decisions, it is not our role to
reevaluate submissions; rather, we will examine the record to determine
whether the agency's judgment was reasonable and in accord with the stated
evaluation criteria and applicable procurement laws and regulations.
Panacea Consulting, Inc., B-299307.4, B-299308.4, July 27, 2007, 2007 CPD
para. 141 at 3. Based on our review of the record here, we find that the
evaluation was unreasonable in several respects, and we therefore sustain
the protest. We discuss TCC's meritorious arguments below.
AMENITIES
TCC challenges the evaluation under the access to amenities subfactor.
With regard to evaluating amenities, the SFO provided as follows:
Offers will be evaluated for amenities within the building or otherwise
available within 2,000 walkable linear feet . . . Offers will be
evaluated for both the quantity and variety of the following amenities:
childcare centers, fitness facilities, postal facilities, restaurants,
fast food establishments, dry cleaners, banks and ATM's, convenience
shops, card/gift shops, and drug stores . . . The best rating will be
given to offers that provide the greatest variety and quantity of
amenities with the most extensive hours of operation existing at the
time of occupancy within the building or adjacent to the building.
AR, Tab 5, SFO, at 21. In determining whether amenities that do not
currently exist, but which would likely exist in the future, should be
considered in the evaluation of an offer, the SFO stated as follows:
Amenities will be considered to be "existing" if they currently exist or
if the offeror can demonstrate to the reasonable satisfaction of the
Government (i.e., though evidence of signed leases, construction
contracts, etc.) that such amenities will exist by the Government's
required occupancy date.
Id.
In support of Stonebridge's proposed future amenities, the awardee
provided a letter with its final offer revision in which it committed to
providing [DELETED] in the awardee's building. The agency ultimately
credited Stonebridge's offer with these amenities, resulting in a rating
of highly successful for the access to amenities subfactor.[3] AR, Tab 19,
Location Technical Advisory Report, attach. 2.
TCC asserts that the agency improperly relaxed the SFO requirements by
accepting Stonebridge's letter of commitment as sufficient proof that the
amenities will exist. The protester states that, had it known that a mere
letter of commitment from the offeror to provide future amenities would
suffice, it could have used this information to propose new amenities that
would have increased its score under the amenities subfactor.
It is a fundamental principle of government procurement that competition
must be conducted on an equal basis, that is, offerors must be treated
equally and be provided with a common basis for the preparation of their
proposals. Continental RPVs, B-292768.2, B-292768.3, Dec. 11, 2003, 2004
CPD para. 56 at 8; Systems Mgmt., Inc.; Qualimetrics, Inc., B-287032.3,
B-287032.4, Apr. 16, 2001, 2001 CPD para. 85 at 8. Our Office will sustain
a protest that an agency improperly relaxed its requirements for the
awardee where the protester establishes a reasonable possibility that it
was prejudiced by the agency's actions. Datastream Sys., Inc. B-291653,
Jan. 24, 2003, 2003 CPD para. 30 at 6. We find that the agency's
evaluation of Stonebridge's proposed amenities was inconsistent with the
solicitation.
As stated above, the SFO provided that "the offeror must demonstrate to
the reasonable satisfaction of the Government (i.e., through evidence of
signed leases, construction contracts, etc.) that such amenities will
exist by the Government's required occupancy date." AR, Tab 5, SFO, at 7.
We think this language informed offerors that some level of evidence of a
proposed amenity, beyond a mere promise of its existence by an offeror,
had to be provided in order for the agency to give credit for the proposed
amenity. While the agency asserts that Stonebridge's promise here is
contractually enforceable, and thus the agency was reasonably satisfied
that the awardee would provide the amenity, there is nothing in the
solicitation that informs offerors that the agency would accept the mere
promise of the offeror instead of such evidence from third parties as
represented by the signed leases or construction contracts cited in the
SFO. Thus, in accepting something less than the required third party
evidence for the proposed amenities, the agency relaxed the solicitation
requirement for the benefit of Stonebridge without furnishing other
offerors a similar opportunity to benefit from the lesser required proof
of amenities.[4]
TCC also asserts that the agency improperly credited Stonebridge with
amenities relating to a proposed Harris Teeter grocery store, since,
according to the protester, the store will not be open by the June 30,
2010 occupancy date, as required by the SFO. In support of this
allegation, the protester points to the Harris Teeter lease proposal,
which states that Harris Teeter itself will build the grocery store inside
the shell provided by the awardee, and that Harris Teeter is not required
to accept the premises prior to April 1, 2010. TCC asserts that, "[e]ven
if work begins at the earliest possible time, the amenity will simply not
exist by the Government's required occupancy date." Protester's Comments
on AR, Apr. 28, 2008, at 16.
We find the agency's evaluation of Stonebridge's Harris Teeter amenities
to be unreasonable. In this regard, neither the intervenor nor the agency
have refuted the protester's position that the Harris Teeter will not be
open for business by the required June 30, 2010 occupancy date based on
its anticipated occupation of the premises on or after April 1, 2010.
While the intervenor maintains that the Harris Teeter will "exist" within
the meaning of the SFO due to the fact that, as of April 1, the store will
be present in the building, even though it will not necessarily be open
for business until after June 30, we find this broad reading of the term
"exists" to be unreasonable. The requirement that the amenity exist by the
required occupancy date clearly was to insure that DOJ employees were able
to use the amenity when they move into the building. Consequently, we
conclude that, in specifying the occupancy date as the relevant date for
purposes of determining whether an amenity would exist, the SFO clearly
put offerors on notice that the amenity would have to be open for business
by that date. As for the agency, it simply states that even if the Harris
Teeter is not open by the occupancy date, it will be open for a
substantial portion of the 15 year lease term. Agency Response, May 9,
2008, at 7 n.7. The SFO, however, did not allow the agency to give credit
for amenities on such a basis. Since nothing in Stonebridge's offer
indicated that the Harris Teeter would be open for business by the
required June 30, 2010 occupancy date, we conclude that the agency
improperly waived this solicitation requirement by crediting Stonebridge's
offer with the Harris Teeter amenities.
KEY PERSONNEL
Discussions with TCC
TCC asserts that the agency improperly failed to conduct meaningful
discussions with it regarding the qualifications of its proposed key
personnel. In this regard, for purposes of evaluating offers under the key
personnel subfactor, offerors were to provide resumes and other
information for six key personnel. AR, Tab 5, SFO, at 22. The SFO provided
that "[o]fferors whose Key Personnel provide the greatest qualifications,
the most favorable past performance on similar projects, and a proven
track record of working together as a team on past successful projects
will be more highly rated." Id. The evaluation team rated offers under
this factor using six criteria: number of years experience,
education/training, special skills, experience with similar projects (past
performance), previous experience working with other key personnel, and
references for past performance on similar projects. Id.; AR, Tab 20, Key
Personnel/Past Performance Technical Advisory Report, at 1-2. The team
then assigned various "preferences" to each criterion. For example, under
"years experience," the team determined that the property manager should
have 10 years experience, while both the construction manager-base
building and construction manager-interiors should have 15 years
experience. The overall ratings under this factor were then assigned based
on the number of personnel who met all six preferences--an offeror would
receive a superior rating if all six personnel met all six preferences, a
highly successful rating if five personnel met all six preferences, and so
on, down to a poor rating where two or fewer personnel met all six
preferences. Id. at 2.
Stonebridge's offer received a superior rating and TCC's a successful
rating under the subfactor. While Stonebridge's rating was based on the
evaluation finding that all of its personnel met each of the six
requirements, TCC's lower rating reflected the determination that TCC's
[DELETED] had only 13 (rather than 15) years experience, and that its
[DELETED] did not meet the past performance preference requiring previous
successful experience with at least two other comparable federal interiors
of at least 350,000 square feet in the Washington, D.C. area.
TCC asserts that the agency improperly failed to advise it during
discussions that its offer had been downgraded based on the qualifications
of its proposed key personnel. According to the protester, had it been
advised of the evaluated shortcomings in personnel experience, it would
have substituted other personnel that satisfied the agency's preferences.
When discussions are conducted, they must at a minimum identify
deficiencies and significant weaknesses in each competitive-range
offeror's proposal. FAR sect. 15.306(d)(3); Multimax, Inc., et al.,
B-298249.6 et al., Oct. 24, 2006, 2006 CPD para. 165 at 12; PAI Corp.,
B-298349, Aug. 18, 2006, 2006 CPD para. 124 at 8. Discussions must be
"meaningful," that is, sufficiently detailed so as to lead an offeror into
the areas of its proposal requiring amplification or revision. Smiths
Detection, Inc., B-298838, B-298838.2, Dec. 22, 2006, 2007 CPD para. 5 at
12; Symplicity Corp., B-297060, Nov. 8, 2005, 2005 CPD para. 203 at 8.
We agree with TCC that the agency was required to advise the firm of its
evaluation findings with regard to the firm's proposed key personnel.
While the agency termed the failure of the TCC employees to meet the
experience preferences only "weaknesses," AR, Tab 20, at 25, it is clear
that, under the agency's evaluation methodology for this subfactor, the
weaknesses in fact were significant. As described above, under the
agency's approach, each proposed employee was evaluated as either meeting
or not meeting the applicable undisclosed preferences. For each employee
that did not meet all of the preferences, the offeror's rating was reduced
by one rating--that is, if one employee did not meet all preferences, the
offeror's rating was reduced from superior to highly acceptable, and so
on. Because two of TCC's employees did not meet every applicable
preference, its rating was reduced to successful. This was a significant
scoring reduction, such that the weaknesses in these areas can only be
considered significant, and the agency's failure to raise the matters
during discussions was inconsistent with its obligation to conduct
meaningful discussions.[5]
Evaluation of Stonebridge's Offer
TCC challenges the evaluation of Stonebridge's offer as superior under the
key personnel subfactor. The protester asserts that the agency improperly
determined that all six of Stonebridge's proposed key personnel met all of
the applicable preferences. According to TCC, two of Stonebridge's
proposed key personnel do not satisfy the preference for previous
experience working together; since only four of Stonebridge's key
personnel met all six criteria, its offer should have received a rating of
only successful.
Our review of Stonebridge's offer confirms that two of the proposed key
personnel ([DELETED] and [DELETED]) had not previously worked together,
and thus failed to satisfy the preference for these particular key
personnel to have worked together. AR, Tab 30, Stonebridge's Clarification
to Offer, July 23, 2007, Item 14. Accordingly, under the agency's approach
to evaluating offers, Stonebridge's offer was improperly rated superior
under the key personnel subfactor; its rating instead should have been
only successful based on the agency's evaluation methodology.
PREJUDICE
Our Office will not sustain a protest absent a showing of prejudice to the
protester; that is, unless the protester demonstrates that, but for the
agency's actions, it would have had a substantial chance of receiving the
award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3;
see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996).
We find that there is a sufficient showing of prejudice here. While the
precise effect of the changes that could result from a correct evaluation
is difficult to determine, we think it is sufficiently clear that a proper
evaluation could have affected the award decision. In this regard, TCC
asserts that it could have provided additional amenities in its building
if it had known that the agency would accept a commitment from the offeror
without supporting third party evidence. Protester's Reply, May 14, 2008,
at 27. Had TCC done so, its subfactor rating of highly successful minus
could have increased, which likewise could have increased its highly
successful rating under the location factor. Similarly, TCC's rating under
the key personnel subfactor--and the key personnel/past performance factor
as well--could have increased substantially had it been provided
discussions in the area, while the reduction of Stonebridge's rating under
the key personnel subfactor also could reduce its highly successful factor
rating. Given the agency's reliance on adjectival ratings in its selection
decision, there is nothing in the record that would permit us to conclude
that the evaluation deficiencies would not have affected the outcome of
the technical evaluation. Thus, even though Stonebridge's price was lower
than TCC's, given the possibility that TCC's offer could be found
technically superior to Stonebridge's, a proper evaluation could result in
the need for the agency to conduct a price/technical tradeoff between the
offers. We will not speculate as to the result of such a tradeoff,
particularly in view of the fact that the technical evaluation factors
were significantly more important than price under the SFO's evaluation
scheme. AR, Tab 5, SFO, at 20. We thus conclude that TCC was competitively
prejudiced by the evaluation deficiencies, and therefore sustain the
protest.
RECOMMENDATION
The lease here has been awarded and signed by the agency and awardee, and
the lease does not contain a termination for convenience clause. AR,
Tab 33. In 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. Here, we do not think
there is any basis to recommend termination. Peter N.G. Schwartz Co.
Judiciary Square Ltd. P'ship, B-239007.3, Oct. 31, 1990, 90-2 CPD
para. 353 at 11. Consequently, we recommend here that the protester be
reimbursed its proposal preparation costs as well as the costs of filing
and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R.
sect. 21.8(d)(1) (2008). The protester should submit its certified claim
for such costs, detailing the time expended and costs incurred, directly
with the agency within 60 days of receiving this decision. 4 C.F.R.
sect. 21.8(f)(1).
The protest is sustained.
Gary L. Kepplinger
General Counsel
------------------------
[1] According to the source selection plan, offers could receive ratings
of Superior, Highly Successful, Successful, Marginal, or Poor. AR, Tab 8,
at 10. In actually evaluating offers, the agency used ratings with pluses
and minuses, which are undefined in the record.
[2] The parties disagree as to whether Stonebridge's offer was rated
successful or highly successful under the past performance subfactor. TCC,
believing that Stonebridge's past performance rating was highly
successful, asserts that the rating instead should be at best successful,
but also could be lower. Protester's Comments on AR, Apr. 28, 2008, at 45
n.27. However, the record supports GSA's position that Stonebridge's final
past performance rating in fact was only successful, AR, Tab 25, at 10,
and TCC has made no showing that a lower rating was warranted.
Accordingly, our decision is based on a rating for Stonebridge of
successful under the past performance subfactor.
[3] With respect to the proposed [DELETED], the agency did not credit
Stonebridge's offer with this amenity because the facilities were not
official [DELETED]. AR, Tab 19, Location Technical Advisory Report, at 6.
[4] The agency asserts that offerors (including TCC) in fact were told
during oral discussions that they could improve their offers by providing
amenities in their building and that "the [g]overnment would accept a
legally enforceable guarantee from a financially responsible offeror [as
evidence] that the amenity would exist at the time of occupancy." AR, Tab
2, Declaration of Neil I. Levy, at 2. The protester, however, denies that
it was told that the agency would accept such a guarantee for amenities
provided by third parties (such as banks, restaurants, etc.); rather,
according to the protester, it understood that such a guarantee was
acceptable only for amenities not involving third parties (such as a
[DELETED]). Protester's Comments on AR, exh. D, Declaration of Thomas E.
Finan, at 2. Not only is the record unclear as to whether the agency in
fact informed all offerors that it had relaxed the SFO requirements for
establishing the existence of amenities provided by third parties, but, in
any case, the Federal Acquisition Regulation (FAR) requires that the
government amend the solicitation when it changes its requirements or
terms and conditions, and there was no amendment issued here. FAR sect.
15.206(a). In this regard, when an agency orally amends a solicitation,
the agency is then required to document the contract file and formalize
the notice with an amendment. FAR sect. 15.206(d); S^3 Ltd., B-287019.2,
et al., Sept. 14, 2001, 2001 CPD para. 165 at 5. In short, there is no
evidence that the agency advised TCC, let alone all offerors, of the
relaxation of the amenities language.
[5] The agency asserts that it was not required to raise these matters
during discussions because the solicitation clearly stated that the
government would consider the number of years experience and past
performance, and thus it was incumbent on the protester to offer the most
qualified team possible, without further prompting from the government.
Again, however, agencies are required to discuss with offerors
"deficiencies, significant weaknesses, and adverse past performance
information to which the offeror has not yet had an opportunity to
respond." FAR sect. 15.306(d)(3). As noted above, under the agency's
evaluation approach, the failure of TCC's employees to meet the agency's
experience preferences represented significant evaluated weaknesses in its
offer. Moreover, the SFO in fact did not disclose the preferences that
resulted in TCC's lowered ratings; thus, for example, when TCC proposed
[DELETED] with only 13 years of experience, it could not know that the
agency had established a preference for a minimum of 15 years experience
that had to be met in order to avoid a significantly reduced rating. Since
it is not necessary for the resolution of this protest, we do not address
whether the agency was required to disclose these preferences in the
solicitation.