B-166868, JUL. 15, 1969

B-166868, JUL. 15, 1969

BID PROTEST - SOLE-SOURCE NEGOTIATION DECISION TO NORAIR ENGINEERING CORPORATION DENYING PROTEST AGAINST ACTION OF GSA IN NEGOTIATING ONLY WITH GULF RESTON, INC., FOR CONSTRUCTION AND LEASE OF NEW GEOLOGICAL SURVEY BUILDING. IN VIEW OF AUTHORITY FOR NEGOTIATION OF LEASE PURCHASE PROJECTS, RECORD ESTABLISHING THAT FORMAL COMPETITIVE ADVERTISING WOULD BE IMPRACTICABLE, AND APPROVAL OF PROJECT BY COMMITTEES OF CONGRESS, SOLE SOURCE PROCUREMENT UNDER NEGOTIATION PROCEDURES PROPER.

TO NORAIR ENGINEERING CORP.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 5, 1969, PROTESTING AGAINST THE ACTION OF THE GENERAL SERVICES ADMINISTRATION (GSA) IN NEGOTIATING ONLY WITH GULF RESTON, INC., FOR THE CONSTRUCTION AND LEASE OF THE PROPOSED NEW GEOLOGICAL SURVEY BUILDING AT RESTON, VIRGINIA.

THE FACTS AND HISTORY RELEVANT TO THIS PROJECT REPORTED TO US BY GSA ARE AS FOLLOWS: "THE SITE AT RESTON, VIRGINIA, WAS SELECTED AFTER CONSIDERATION OF NUMEROUS SITES IN THE WASHINGTON AREA IN ACCORDANCE WITH PROSPECTUS PROJECT NO. 49907 SUBMITTED TO THE PUBLIC WORKS COMMITTEE OF THE SENATE AND THE PUBLIC WORKS COMMITTEE OF THE HOUSE OF REPRESENTATIVES IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7 (A) OF THE PUBLIC BUILDINGS ACT OF 1959, AS AMENDED, 40 U.S.C. 606. THIS PROSPECTUS WAS APPROVED BY THE COMMITTEES ON APRIL 16, 1962, AND JULY 16, 1962, RESPECTIVELY.'THE PRELIMINARY NEGOTIATIONS FOR THE RESTON SITE CULMINATED IN AN OFFER OF SALE AND DONATION OF LAND TO THE UNITED STATES OF AMERICA DATED MAY 16, 1966, BY RESTON VA., INC. (NOW GULF RESTON, INC.). THE OFFER WAS ACCEPTED ON AUGUST 5, 1966, AND THE PROPERTY CONVEYED TO THE UNITED STATES OF AMERICA BY DEED DATED DECEMBER 1, 1966, FOR A CONSIDERATION OF $245,000. IN THE DEED DESCRIPTION CONVEYING THE PROPERTY, THE PARCEL WAS DESCRIBED AS A SINGLE TRACT COMPRISING 85.0559 ACRES. HOWEVER, PARAGRAPH 2 (A) OF THE OFFER OF MAY 16, 1966, TO THE GOVERNMENT SPECIFICALLY PROVIDES: "- FIFTY (50) ACRES OF THE PROPERTY SHALL BE CONVEYED BY RESTON AND ACCEPTED BY THE GOVERNMENT AS A GIFT. THIRTY-FIVE (35) ACRES OF THE PROPERTY SHALL BE SOLD TO THE GOVERNMENT BY RESTON FOR WHICH THE GOVERNMENT SHALL PAY RESTON THE SUM OF TWO HUNDRED FORTY-FIVE THOUSAND DOLLARS ($245,000) ... . - "THE OFFER OF SALE AND DONATION CONTAINS OTHER PROVISIONS RELATING TO THE ACQUISITION OF ADDITIONAL LAND AT PREDETERMINED PRICES, RESTRICTIONS ON THE DEVELOPMENT OF THE ADJOINING PROPERTY, AND THE FURNISHING OF ROADS, UTILITIES, AND SEWERS.'ONE OF THE CONSIDERATIONS MOVING TO RESTON VA., INC., IN THIS UNDERTAKING WAS THE CONSTRUCTION BY THE GOVERNMENT OF THE GEOLOGICAL SURVEY HEADQUARTERS BUILDING ON THE SITE AS RAPIDLY AS POSSIBLE, WHICH WOULD INCREASE THE POTENTIAL FOR THE SALE OF HOMES. THIS INTENT IS COVERED BY PARAGRAPH 4 (B) OF THE OFFER WHICH PROVIDES: "-/B) THE GOVERNMENT AGREES TO PROCEED AS RAPIDLY AS POSSIBLE WITH THE DESIGN OF THE BUILDINGS TO BE ERECTED ON THE PROPERTY AND TO USE ITS BEST EFFORTS TO INSURE THAT THE NECESSARY REQUESTS AND SUPPORTING MATERIALS AND INFORMATION ARE PREPARED AND SUBMITTED TO THE CONGRESS FOR CONGRESS TO APPROPRIATE FUNDS FOR THE BUILDINGS AND THAT CONSTRUCTION OF THE BUILDINGS IS COMMENCED AND PROCEEDS AS RAPIDLY AS POSSIBLE AFTER FUNDS ARE APPROPRIATED BY THE CONGRESS FOR SUCH CONSTRUCTION.'HOWEVER, ALTHOUGH THE DESIGN PLANS AND SPECIFICATIONS ESTIMATED TO COST $1,516,000 FOR THE NEW FACILITY ARE SCHEDULED FOR COMPLETION IN JUNE 1969, BUDGETARY RESTRICTIONS ON CONSTRUCTION FUNDS HAVE PRECLUDED THE PLANNED CONSTRUCTION BY THE GOVERNMENT WITH APPROPRIATED MONEYS FOR THE PRESENT. THEREFORE, IN VIEW OF THE FUNDS ALREADY EXPENDED FOR SITE ACQUISITION AND DESIGN AND IN RESPONSE TO A PROPOSAL FROM GULF RESTON TO CONSTRUCT A BUILDING FOR LEASE TO THE GOVERNMENT ON THIS SITE, IT WAS DETERMINED (WITH THE CONCURRENCE OF THE BUREAU OF THE BUDGET) TO SUBMIT A NEW LEASE CONSTRUCTION PROSPECTUS TO THE COMMITTEES ON PUBLIC WORKS OF THE SENATE AND HOUSE OF REPRESENTATIVES PURSUANT TO P.L. 90-550 (82 STAT. 944) WHICH PROVIDES: "-NO PART OF ANY APPROPRIATION CONTAINED IN THIS ACT SHALL BE USED FOR THE PAYMENT OF RENTAL ON LEASE AGREEMENTS FOR THE ACCOMMODATION OF FEDERAL AGENCIES IN BUILDINGS AND IMPROVEMENTS WHICH ARE TO BE ERECTED BY THE LESSOR FOR SUCH AGENCIES AT AN ESTIMATED COST OF CONSTRUCTION IN EXCESS OF $200,000 OR FOR THE PAYMENT OR THE SALARY OF ANY PERSON WHO EXECUTES SUCH A LEASE AGREEMENT: PROVIDED, THAT THE FOREGOING PROVISO SHALL NOT BE APPLICABLE TO PROJECTS FOR WHICH A PROSPECTUS FOR THE LEASE CONSTRUCTION OF SPACE HAS BEEN SUBMITTED TO THE CONGRESS AND APPROVAL MADE IN THE SAME MANNER AS FOR THE PUBLIC BUILDINGS CONSTRUCTION PROJECTS PURSUANT TO THE PUBLIC BUILDINGS ACT OF 1959.- "THIS PROSPECTUS FOR PROPOSED LEASE (PROJECT NO. 45-0102-REVISION OF PROJECT FORMERLY NO. 49907) WAS APPROVED BY THE PUBLIC WORKS COMMITTEE OF THE HOUSE OF REPRESENTATIVES ON MAY 5, 1969, AND BY THE PUBLIC WORKS COMMITTEE OF THE SENATE ON APRIL 25, 1969. IT FULLY DESCRIBES OUR INTENT RELATIVE TO THIS TRANSACTION IN THE STATEMENT ON PAGE 2 UNDER THE HEADING JUSTIFICATION: "-IN VIEW OF CURRENT BUDGETARY RESTRICTIONS WITH RESPECT TO CAPITAL IMPROVEMENT EXPENDITURE, IT IS UNLIKELY THAT FUNDS WILL BE AVAILABLE FOR CONSTRUCTION IN THE FORESEEABLE FUTURE. RECOGNIZING THAT THE LACK OF FUNDS WILL CAUSE A DELAY IN THE CONSTRUCTION OF THE GEOLOGICAL SURVEY HEADQUARTERS BUILDING, GULF RESTON, INCORPORATED, THE DEVELOPER OF THE RESTON COMMUNITY, HAS PROPOSED TO SECURE FUNDS FOR CONSTRUCTION OF THE BUILDING, ADVERTISE FOR CONSTRUCTION BIDS UTILIZING APPROVED DESIGN PLANS AND SPECIFICATIONS PREPARED BY THE ARCHITECT-ENGINEER EMPLOYED BY THE GENERAL SERVICES ADMINISTRATION, AND AWARD A CONSTRUCTION CONTRACT TO THE CONTRACTOR WHOSE BID IS CONSIDERED BY GULF-RESTON, INC., AND GSA TO BE IN THEIR BEST INTEREST. THE BUILDING WILL BE LEASED TO THE GOVERNMENT FOR A FIRM TERM OF 20 YEARS, WITHOUT SERVICES AND UTILITIES, AT AN ANNUAL RENTAL RATE EQUAL TO THE AMORTIZED COST OF CONSTRUCTION, INTEREST, INSURANCE, TAXES, AND ADMINISTRATIVE COSTS WITH AN OPTION IN THE GOVERNMENT TO PURCHASE THE BUILDING AT ANYTIME DURING THE LEASE TERM UPON SIX MONTHS NOTICE TO GULF-RESTON, INC., AT A PURCHASE PRICE NOT TO EXCEED THE REMAINING UNPAID PRINCIPAL OF GULF- RESTON'S CONSTRUCTION COSTS. IN THE EVENT THE PURCHASE OPTION IS NOT EXERCISED BY THE GOVERNMENT, GULF-RESTON, INC., WOULD CONVEY FEE TITLE TO THE BUILDING AT THE EXPIRATION OF THE 20-YEAR LEASE TERM AT NO COST TO THE GOVERNMENT. ON THE BASIS OF THIS PROPOSAL NO PROFIT WILL ACCRUE TO THE LESSOR.-"

YOU STATE THAT SINCE THE NEW GEOLOGICAL SURVEY BUILDING IS TO BE BUILT ON GROUND PRESENTLY OWNED BY THE UNITED STATES GOVERNMENT, YOU DO NOT UNDERSTAND WHY THIS LEASE-PURCHASE DEVELOPMENT IS NOT BEING OFFERED TO OTHER QUALIFIED DEVELOPERS.

IN ITS REPORT GSA STATES THAT WHILE IT IS RECOGNIZED THAT THE BUILDING UNDER CONSIDERATION IS TO BE CONSTRUCTED ON A PREDETERMINED SITE IN ACCORDANCE WITH PRESCRIBED DRAWINGS AND SPECIFICATIONS, WITHIN A PREDESCRIBED TIME LIMIT, NONETHELESS THE REQUIREMENT FOR ATTENDANT SERVICES, THAT IS, RIGHTS OF WAY FOR ROADS, UTILITIES AND SEWERS TO MAKE THE SITE USABLE, WHICH ARE AVAILABLE ONLY WITH THE ACQUIESCENCE OF GULF RESTON UNDER THE EXISTING CIRCUMSTANCES, MAKE ADVERTISED PROCUREMENT UNREALISTIC AND IMPRACTICABLE.

SECTION 210 (H) (1) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 490 (H) (1), PROVIDES AS FOLLOWS:

"THE ADMINISTRATOR IS AUTHORIZED TO ENTER INTO LEASE AGREEMENTS WITH ANY PERSON, COPARTNERSHIP, CORPORATION, OR OTHER PUBLIC OR PRIVATE ENTITY, WHICH DO NOT BIND THE GOVERNMENT FOR PERIODS IN EXCESS OF TWENTY YEARS FOR EACH SUCH LEASE AGREEMENT, ON SUCH TERMS AS HE DEEMS TO BE IN THE INTEREST OF THE UNITED STATES AND NECESSARY FOR THE ACCOMMODATION OF FEDERAL AGENCIES IN BUILDINGS AND IMPROVEMENTS WHICH ARE IN EXISTENCE OR TO BE ERECTED BY THE LESSOR FOR SUCH PURPOSES AND TO ASSIGN AND REASSIGN SPACE THEREIN TO FEDERAL AGENCIES.'

LEASE NEGOTIATIONS, SUCH AS HERE INVOLVED, ARE AUTHORIZED PURSUANT TO SECTION 302 (C) (10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 41 U.S.C. 252 (C) (10) WHICH PROVIDES:

"/C) ALL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES SHALL BE MADE BY ADVERTISING AS PROVIDED IN SECTION 253 OF THIS TITLE EXCEPT THAT SUCH PURCHASES AND CONTRACTS MAY BE NEGOTIATED BY THE AGENCY HEAD IF

"/10) FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO SECURE COMPETITION; "

UNDER THIS AUTHORITY, AS IMPLEMENTED BY SECTION 1-3.210 OF THE FEDERAL PROCUREMENT REGULATIONS, A LEASE MAY BE NEGOTIATED WITHOUT ADVERTISING "IF IT IS IMPRACTICABLE TO SECURE COMPETITION.' THE RECORD AS SUMMARIZED ABOVE SUFFICIENTLY JUSTIFIES THE NEGOTIATION OF A LEASE WITH GULF RESTON AS THE SOLE SOURCE FOR THE FACILITY CONTEMPLATED. WE HAVE HELD THAT ADMINISTRATIVE DETERMINATIONS TO NEGOTIATE A CONTRACT ON A SOLE-SOURCE BASIS PURSUANT TO PARAGRAPH (10) ARE NOT SUBJECT TO QUESTION BY OUR OFFICE PROVIDED A REASONABLE BASIS EXISTS FOR THE EXERCISE OF SUCH AUTHORITY. COMP. GEN. 484, 492. IN THIS REGARD, SECTION 1-3.305 OF THE REGULATIONS, ISSUED IN IMPLEMENTATION OF 41 U.S.C. 257, PROVIDES THAT A DETERMINATION AND FINDINGS ON THE IMPRACTICABILITY OF SECURING COMPETITION SHALL SET FORTH ENOUGH FACTS AND CIRCUMSTANCES TO CLEARLY AND CONVINCINGLY ESTABLISH THAT THE USE OF FORMAL ADVERTISING WOULD NOT BE FEASIBLE OR PRACTICABLE. WE BELIEVE THAT THE FACTS, CIRCUMSTANCES AND CONCLUSIONS IN THE RECORD CLEARLY AND CONVINCINGLY ESTABLISH THAT FORMAL COMPETITIVE ADVERTISING WOULD BE IMPRACTICABLE AND THAT GULF RESTON IS THE ONLY SOURCE FOR PROCUREMENT OF THE LEASE UNDER NEGOTIATION PROCEDURES.

FURTHER, THE RECORD INDICATES THAT WHEN BUDGETARY RESTRICTIONS ON CONSTRUCTION FUNDS PRECLUDED THE PLANNED CONSTRUCTION OF THE NEW GEOLOGICAL SURVEY BUILDING BY THE GOVERNMENT WITH APPROPRIATED MONEYS, GSA SUBMITTED A NEW LEASE CONSTRUCTION PROSPECTUS TO THE COMMITTEES ON PUBLIC WORKS FOR APPROVAL PURSUANT TO THE PROVISIONS OF THE INDEPENDENT OFFICES AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT APPROPRIATION ACT, 1969, PUBLIC LAW 90-550, 82 STAT. 944. THE LEASE CONSTRUCTION PROSPECTUS PROVIDED FOR THE CONSTRUCTION OF THE NEW GEOLOGICAL SURVEY BUILDING BY GULF RESTON WITH ITS OWN FUNDS AND FOR THE LEASING OF THE BUILDING TO THE GOVERNMENT. THE PROSPECTUS FOR PROPOSED LEASE (PROJECT NO. 45-0102--- REVISION OF PROJECT FORMERLY NO. 49907) WAS APPROVED BY THE PUBLIC WORKS COMMITTEE OF THE HOUSE OF REPRESENTATIVES ON MAY 5, 1969, AND BY THE PUBLIC WORKS COMMITTEE OF THE SENATE ON APRIL 25, 1969.

WHILE GULF RESTON BY OWNERSHIP OF ADJOINING LAND IS THE SOLE SOURCE FOR THE CONSTRUCTION AND LEASE OF THE PROPOSED NEW GEOLOGICAL SURVEY BUILDING AT RESTON, VIRGINIA, AND COMPETITION IS PRECLUDED BECAUSE OF THIS PARTICULAR CIRCUMSTANCE, THE LEASE AGREEMENT WILL PROVIDE THAT GULF RESTON WILL ADVERTISE FOR BIDS FOR CONSTRUCTION OF THE FACILITY UTILIZING GSA BIDDING DOCUMENTS MODIFIED IN A MUTUALLY ACCEPTABLE MANNER. THE CONSTRUCTION CONTRACT WILL BE AWARDED TO THE CONTRACTOR WHOSE BID IS CONSIDERED BY GULF RESTON AND GSA TO BE IN THE BEST INTEREST OF THE GOVERNMENT AND GULF RESTON.

IN VIEW OF THE APPROVAL BY THE COMMITTEES OF CONGRESS AND THE CIRCUMSTANCES PRESENT IN THIS CASE, WE ARE OF THE OPINION THAT GSA IS AUTHORIZED TO LEASE A BUILDING TO BE CONSTRUCTED BY GULF RESTON AND THAT THE LEASE THEREFOR MAY BE NEGOTIATED WITH GULF RESTON UNDER 41 U.S.C. 252 (C) (10). ACCORDINGLY, YOUR PROTEST MUST BE DENIED.