B-145486, JUN. 15, 1961

B-145486, JUN. 15, 1961

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

WE HAVE A LETTER OF APRIL 27, 1961, WITH ENCLOSURES, SIGNED BY THE COMMISSIONER, PUBLIC BUILDINGS SERVICE, YOUR REFERENCE PRAL,FURNISHING A REPORT AND PERTINENT PAPERS PURSUANT TO OUR REQUEST OF APRIL 10, 1961, ON THE AWARD OF A LEASE FOR A BUILDING TO BE CONSTRUCTED FOR OCCUPANCY BY THE SOIL CONSERVATION SERVICE IN SPARTANBURG, SOUTH CAROLINA.

THE INVITATION FOR THE LEASE, NO. AT-54, WAS ISSUED JANUARY 23, 1961, BY THE GSA BUSINESS SERVICE CENTER AT ATLANTA, GEORGIA. PARAGRAPH NO. 1 OF THE SPECIFICATIONS REQUIRED THAT THE PREMISES OFFERED FOR LEASE PROVIDE A CONTIGUOUS AREA OF 9,880 SQUARE FEET OF FLOOR SPACE ON A SINGLE FLOOR FOR A PHOTO-REPRODUCTION LABORATORY AND RELATED FACILITIES. THE SPECIFICATIONS FURTHER PROVIDED:

"2.BID DATA: BIDDER SHALL SET FORTH IN SPACE PROVIDED ON THE BID FORM, OR ON ATTACHMENTS THERETO, WHAT HE PROPOSES TO FURNISH UNDER EACH OF THE APPROPRIATE SUCCEEDING PARAGRAPHS OF THIS SCHEDULE.

"3. SPACE REQUIREMENTS:

A. APPROXIMATELY 24,458 SQUARE FEET OF NET USEABLE OFFICE AND RELATED SPACE. NET USEABLE SPACE FOR THE PURPOSE OF THIS PARAGRAPH SHALL BE FIGURED EXCLUSIVE OF REST ROOMS, LADIES' LOUNGES, STAIRWELLS, STACKS, ELEVATOR SHAFTS, BUILDING AND EQUIPMENT AREAS, SERVICE AREAS, FIXED CORRIDORS, AND SPACE USED IN COMMON WITH OTHER TENANTS.

B. NUMBER OF FLOORS AND AREA PER FLOOR: LOFT TYPE SPACE WILL NOT MEET THE REQUIREMENTS OF THE GOVERNMENT DUE TO LACK OF FLEXIBILITY IN OFFICE LAYOUT FOR ALLOCATION TO NUMEROUS SEPARATE AND DISTINCT GOVERNMENT AGENCY TENANTS. SPACE OFFERED SHOULD BE ON TWO OR MORE FLOORS AT THE BIDDER'S DISCRETION IN DEVELOPMENT OF HIS DESIGN. AT THE DISCRETION OF THE BIDDER, HE MAY PROVIDE SPACE FOR AIR CONDITIONING EQUIPMENT, HEATING EQUIPMENT, FUEL STORAGE, AND BUILDING MAINTENANCE SUPPLIES STORAGE IN A BASEMENT, ON THE ROOF, OR ON THE GROUND FLOOR. IN ANY EVENT, AREAS USED FOR SUCH PURPOSES WILL NOT BE CONSIDERED IN COMPUTATION OF NET USEABLE FLOOR SPACE AS DEFINED IN ITEM 3A OF THIS SCHEDULE.'

WHILE THE LANGUAGE IS NOT ENTIRELY CLEAR, IT APPEARS TO HAVE BEEN THE INTENT OF THE CONTRACTING AGENCY TO REQUIRE THAT THE 9,880 SQUARE FEET BE "NET USEABLE FLOOR SPACE" AS DEFINED IN PARAGRAPH NO. 3.

UPON BID OPENING ON FEBRUARY 24, 1961, THE LOW BID WAS FOUND TO BE THAT OF THE ATLAS REALTY COMPANY (WHICH OFFERED SPACE IN THE BUILDING NOW BEING OCCUPIED BY SOIL CONSERVATION SERVICE UNDER A LEASE EXPIRING JUNE 30, 1961), AT AN ANNUAL RENTAL OF $54,453.50, INCLUDING SERVICES, FOR A 5-YEAR PERIOD WITH AN ANNUAL RENEWAL OPTION FOR FIVE SUCCEEDING YEARS AT THE SAME RENTAL RATE. IT WAS DETERMINED BY THE CONTRACTING OFFICER TO REJECT THAT BID, HOWEVER, BECAUSE IT DID NOT OFFER 9,880 CONTIGUOUS SQUARE FEET OF NET USEABLE FLOOR SPACE ON ONE FLOOR AS REQUIRED. THE SECOND LOW BID WAS ALSO REJECTED BECAUSE THE PROPOSED BUILDING SITE WAS NOT LOCATED WITHIN THE TWO PERMISSIBLE AREAS. THE THIRD LOW BID, SUBMITTED BY THE NORTH PACOLET CORPORATION, OFFERED A BUILDING TO BE CONSTRUCTED AT AN ANNUAL RENTAL INCLUDING SERVICES FOR THE 5-YEAR PERIOD OF $78,750 WITH NO PROVISION FOR RENEWALS. THAT BID INCLUDED THE STATEMENT,"THE BUILDING WILL EQUAL OR BETTER THAN SCHEDULE A OF SPECIFICATIONS.'

THE BID FORM REQUIRED THAT THE BIDDER FURNISH WITH HIS BID A GENERAL DESCRIPTION OF THE BUILDING INCLUDING AREA PER FLOOR AND FLOOR PLANS. NORTH PACOLET FURNISHED FLOOR PLANS SHOWING THAT THE PROPOSED BUILDING WOULD LACK 290 SQUARE FEET OF MEETING THE REQUIREMENT FOR 9,880 SQUARE FEET OF NET USEABLE CONTIGUOUS FLOOR SPACE ON A SINGLE FLOOR.

YOUR AGENCY'S OFFICIAL REPORT, CONTAINED IN THE LETTER OF APRIL 27, STATES THAT THE NORTH PACOLET BID "IS THE LOWEST RESPONSIVE BID, OFFERING TO MEET ALL THE REQUIREMENTS OF THE SPECIFICATIONS.' HOWEVER, IN A MEMORANDUM OF MARCH 9, 1961, FROM THE CHIEF, BUILDINGS MANAGEMENT DIVISION TO THE CHIEF, ACQUISITION AND DISPOSAL DIVISION OF YOUR AGENCY, THERE APPEARS THE FOLLOWING STATEMENT:

"IN REVIEWING THE PLANS SUBMITTED WITH THIS BID, IT WAS FOUND THAT THE NET SQUARE FOOTAGE SHOWN ON THE ARCHITECTS DRAWINGS DID NOT MEASURE OUT TO THE FIGURES SHOWN. THIS WAS DISCUSSED WITH THE PROPONENT AND THE DISCREPANCIES ARE DUE TO MISINTERPRETATIONS OF THE TERM NET ASSIGNABLE SPACE. THE LOT PROPOSED HOWEVER, IS SUFFICIENTLY LARGE TO PROVIDE THE REQUIRED SPACE AND THE BIDDER WILL PROVIDE THE AMOUNT SPECIFIED.'

FURTHER, IN AN INTERVIEW CONDUCTED BY REPRESENTATIVES OF OUR OFFICE ON MAY 17, 1961, THE CHIEF, ACQUISITION AND DISPOSAL SECTION, REAL ESTATE DIVISION OF THE DEPARTMENT OF AGRICULTURE, STATED, IN EFFECT, THAT THE NORTH PACOLET CORPORATION HAD NOT MET THE REQUIREMENTS OF THE INVITATION BECAUSE THE NET SQUARE FOOTAGE OF USEABLE FLOOR SPACE OFFERED ON ONE FLOOR WAS ONLY 9,590 INSTEAD OF THE STATED MINIMUM OF 9,880. HE ALSO STATED THAT A 10 PERCENT DEVIATION FROM THE REQUIREMENT WAS ALLOWED AND THAT NEGOTIATION WOULD RESOLVE ANY QUESTIONS REGARDING LAYOUT OF THE VARIOUS FUNCTIONS WITHIN THE UNIT.

AN AWARD MADE TO NORTH PACOLET ON MARCH 24, 1961, ON THE BASIS OF THE THIRD LOW BID WAS PROTESTED BY THE LOW BIDDER.

THIS IS A FORMALLY ADVERTISED PROCUREMENT UNDER WHICH AWARD MUST BE MADE, AS STATED IN PARAGRAPH NO. 10 OF THE INSTRUCTIONS TO BIDDERS---

"* * * TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION TO BID, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, CONSIDERING PRICE, AND SUCH OTHER FACTORS AS MAY BE SPECIFIED IN THIS INVITATION, THE SCHEDULES, OR THE BID FORMS. * * *"

THE FLOOR PLAN SUBMITTED WITH THE BID, PURSUANT TO THE TERMS OF THE INVITATION, MUST BE CONSIDERED A PART OF THE BID. 40 COMP. GEN. 432, 434. THE BID UPON WHICH AWARD WAS BASED MUST, THEREFORE, BE CONSIDERED TO HAVE OFFERED SOMETHING MATERIALLY LESS THAN REQUIRED BY THE TERMS OF THE INVITATION, PARTICULARLY SINCE THE ADVERTISEMENT WAS BASED UPON THE PROPOSITION THAT A SPACE OF 9,880 SQUARE FEET ON A SINGLE FLOOR WAS AN ABSOLUTE MINIMUM. A BID NOT IN MATERIAL COMPLIANCE WITH THE TERMS OF THE INVITATION MUST BE REJECTED AS NON-RESPONSIVE. 17 COMP. GEN. 554. THE RULE APPLIES TO LEASES AS WELL AS TO OTHER PROCUREMENTS. 34 COMP. GEN. 119. A DEVIATION IN A BID IS MATERIAL WHEN IT GOES TO THE PRICE, QUANTITY, OR QUALITY OF THE PRODUCT OFFERED. 30 COMP. GEN. 179, 181. THERE APPEARS LITTLE QUESTION THAT A SHORTAGE OF 290 SQUARE FEET OF NET USABLE FLOOR AREA MUST BE REGARDED AS MATERIAL. SINCE THE DEVIATION WAS MATERIAL, THE BIDDER SHOULD NOT HAVE BEEN GIVEN THE OPPORTUNITY AFTER OPENING TO REMEDY THE DEFECT AND, UNDER THE CIRCUMSTANCES, THE PURPORTED AWARD WAS VOIDABLE. SEE 40 COMP. GEN. 447 AND CASES CITED THEREIN.

WE RECOGNIZE THAT UNDER THE RULE AT 10 COMP. GEN. 160, AN OVERALL OFFER TO COMPLY MAY BE REGARDED AS OVERCOMING ANY DEFICIENCIES IN THE DATA FURNISHED WITH THE BID. CF. 36 COMP. GEN. 15; 40 COMP. GEN. 432, 435. OUR VIEW, HOWEVER, THE PROVISION OF THE NORTH PACOLET BID QUOTED IN A PRECEDING PARAGRAPH SHOULD MORE PROPERLY BE REGARDED AS THE ASSERTION OF A CONCLUSION RATHER THAN AN OVERALL OFFER OF COMPLIANCE.

THE WORK PAPERS FURNISHED WITH YOUR REPORT AND THE RESULTS OF AN INVESTIGATION CONDUCTED BY OUR REPRESENTATIVES INDICATE THAT THE 9,880 SQUARE FEET OF CONTIGUOUS NET USABLE FLOOR SPACE ON A SINGLE FLOOR FOR THE PHOTO-REPRODUCTION LABORATORY AREA IS REGARDED AS AN "IDEAL" TO BE ATTAINED. OUR REPRESENTATIVES, HOWEVER, WERE UNABLE TO FIND ANY SPECIFIC SUPPORT FOR THE ADMINISTRATIVE POSITION THAT ECONOMIES OR EFFICIENCIES WOULD RESULT FROM THE PROPOSED LAYOUT. THERE DID NOT APPEAR TO BE ANY STANDARD OR MANDATORY CRITERIA ESTABLISHED EITHER BY GSA OR THE SOIL CONSERVATION SERVICE FOR THE ARRANGEMENT OF THE FACILITIES; NOR HAD THERE BEEN ESTABLISHED ANY BASIS FOR ASSESSING THE BENEFITS TO BE DERIVED BY SUCH ARRANGEMENT AGAINST THE INCREASED COSTS WHICH WOULD, AT LEAST IN THIS INSTANCE, RESULT.

THE DETERMINATION OF ACTUAL NEEDS OF THE GOVERNMENT IS PRIMARILY WITHIN THE JURISDICTION OF THE ADMINISTRATIVE AGENCY; HOWEVER, THE STANDARD TO BE APPLIED IN ESTABLISHING THOSE NEEDS IS THE MINIMUM REASONABLY REQUIRED RATHER THAN THE MAXIMUM DESIRED. 32 COMP. GEN. 384, 387.

IN THE CIRCUMSTANCES WE MUST CONCLUDE THAT THE CONTRACT AWARDED SHOULD BE CANCELLED AND THE PROCUREMENT READVERTISED. WE SUGGEST THAT IN MAKING THE REPROCUREMENT THE SPECIFICATIONS BE STRINGENTLY REEXAMINED IN TERMS OF THE PROPER STANDARD.