B-152927, MAY 21, 1964

B-152927, MAY 21, 1964

TO ROSS, STARK, MATZKIN AND DAY:

BY LETTERS OF NOVEMBER 19, 1963, JANUARY 2, 1964, AND APRIL 28, 1964, YOU PROTESTED ON BEHALF OF INTERCONTINENTAL INNS, INC., AGAINST THE READVERTISEMENT FOR BIDS FOR SPACE TO BE OCCUPIED BY NIH MENTAL HEALTH INSTITUTE UNDER INVITATION NO. GS-PBS-03-590 AND THE PROPOSED AWARD TO THE WASHINGTON SCIENCE CENTER CONDUIT, INC., UNDER INVITATION FOR BIDS NO. GS- PBS-03-595.

THE FIRST INVITATION ISSUED ON AUGUST 19, 1963, REQUESTED BIDS TO BE OPENED SEPTEMBER 12, 1963, FOR APPROXIMATELY 102,000 SQUARE FEET OF NET USABLE OFFICE SPACE WITHIN A FOUR-MILE RADIUS OF THE PERIMETER OF NIH, BETHESDA, MARYLAND, EXCLUDING THE DISTRICT OF COLUMBIA. THE DATE OF POSSESSION WAS FIXED AT NO LATER THAN APRIL 1, 1964, AND BY ADDENDUM NO. 1, DATED SEPTEMBER 6, 1963, THE INVITATION WAS AMENDED TO PERMIT A PLUS OR MINUS TEN PERCENT VARIATION IN THE AREA OFFERED. BY ADDENDUM NO. 2, DATED SEPTEMBER 10, 1963, THE BID OPENING DATE WAS EXTENDED TO SEPTEMBER 19, 1963, AT WHICH TIME FOURTEEN BIDS WERE RECEIVED AND OPENED. INTERCONTINENTAL INNS, INC. WITH A BID AT $4.05 PER SQUARE FOOT, INCLUDING ALL BUILDING OPERATING SERVICES AND MAINTENANCE, WAS APPARENTLY THE LOW RESPONSIVE BIDDER FOR A TEN YEAR TERM FOR SPACE IN A PROPOSED ELEVEN-STORY BUILDING TO BE ERECTED OVER A BASEMENT GARAGE PREVIOUSLY CONSTRUCTED BY IT AT 801 ROEDER ROAD, SILVER SPRING, MARYLAND.

GSA HAS REPORTED THAT WHEN THE BIDS WERE OPENED IT BECAME APPARENT THAT SOME OF THE LOCATIONS OFFERED WOULD ENTAIL ADDITIONAL COSTS TO THE GOVERNMENT (OTHER THAN RENTAL AND UTILITIES), THE MAGNITUDE OF WHICH HAD NOT BEEN FULLY APPRECIATED AND PROVIDED FOR DURING THE PREPARATION OF THE SPECIFICATIONS AND THE INVITATION. IN THIS REGARD, THE RECORD SHOWS THAT ON OCTOBER 24, 1963, NIH TRANSMITTED TO GSA AN ECONOMIC ANALYSIS WHICH INDICATED THAT AFTER TAKING INTO CONSIDERATION CERTAIN OPERATING COSTS, INCLUDING TRANSPORTATION, COMMUNICATION AND GUARD SERVICE, IT WAS IN THE GOVERNMENT'S BEST INTEREST TO ACCEPT A BID OTHER THAN INTERCONTINENTAL-S. GSA HAS REPORTED THAT ITS STUDIES OF THE DATA FURNISHED CORROBORATED THE NIH ANALYSIS; THAT IT WAS FOUND THAT THE SPACE REQUIREMENTS WERE EXCESSIVE AND SHOULD HAVE BEEN LIMITED TO NOT LESS THAN 95,000 SQUARE FEET NOT MORE THAN 102,000 SQUARE FEET RATHER THAN 102,000 PLUS OR MINUS TEN PERCENT AND THAT DELIVERY OF THE SPACE COULD BE POSTPONED TO A DATE NOT LATER THAN JUNE 1, 1964, RATHER THAN APRIL 1, 1964.

GSA HAS ADVISED FURTHER THAT FOR THE FOREGOING REASONS IT WAS DECIDED TO BE IN THE GOVERNMENT'S BEST INTEREST TO REJECT ALL BIDS AND READVERTISE ON THE BASIS OF REVISED SPECIFICATIONS WHICH WOULD REFLECT MORE ACCURATELY THE SPACE REQUIREMENT, PERMIT EVALUATION OF FACTORS OF ACTUAL COST TO THE GOVERNMENT OVER AND ABOVE RENTAL AND UTILITIES, AND WHICH WOULD PERMIT INCLUSION OF A PERFORMANCE BOND REQUIREMENT TO PROTECT THE GOVERNMENT IN THE EVENT OF NON-DELIVERY ON THE SCHEDULED OCCUPANCY DATE. GSA ESTIMATED THAT THE CHANGE IN SPACE REQUIREMENTS ALONE COULD RESULT IN A POTENTIAL SAVING OF AS MUCH AS $400,000 OVER A TEN-YEAR PERIOD. ACCORDINGLY, ON NOVEMBER 19, 1963, THE CONTRACTING OFFICER MADE A WRITTEN DETERMINATION THAT ALL BIDS SHOULD BE REJECTED AND ON NOVEMBER 27, 1963, A NEW INVITATION, NO. GS-PBS-03-595, INCLUDING ADDITIONAL EVALUATION AND AWARD FACTORS WAS ISSUED WITH A BID OPENING DATE SCHEDULED FOR DECEMBER 17, 1963, SUBSEQUENTLY EXTENDED TO APRIL 30, 1964. THE PERTINENT PROVISIONS OF THE SECOND INVITATION WERE AS FOLLOWS:

"1. LOCATION

WITHIN A FOUR (4) AIR MILE RADIUS OF THE PERIMETER OF NATIONAL INSTITUTE OF HEALTH, BETHESDA, MARYLAND, EXCLUDING THE DISTRICT OF COLUMBIA. BIDS OFFERING SPACE OUTSIDE THIS AREA WILL BE REJECTED AS NON-RESPONSIVE.

"2. TYPE AND AMOUNT OF NET USABLE SPACE

"/A) FIRST CLASS OFFICE SPACE IS REQUIRED. SPACE OFFERED MUST BE IN A BUILDING THAT IS SOUND AND SUBSTANTIAL CONSTRUCTION. SPACE OFFERED MUST BE ALTERED TO CONFORM WITH THE REQUIREMENTS SET FORTH IN THIS INVITATION.

"/B) BIDS ARE SOLICITED FOR NOT LESS THAN 95,000 NET USABLE SQUARE FEET NOR MORE THAN 102,000 NET USABLE SQUARE FEET OF SPACE AT ONE LOCATION. BIDS NOT IN COMPLIANCE WITH THE ABOVE WILL BE REJECTED AS NONRESPONSIVE.

"/C) THE GOVERNMENT RESERVES THE RIGHT TO REJECT THOSE BIDS OFFERING SPACE WITHIN THE AREA SPECIFIED IN (A) ABOVE WHERE SUCH LOCATIONS, IN THE SOLE DETERMINATION OF THE CONTRACTING OFFICER, ARE:

(1) OF POOR GENERAL ENVIRONMENT.

(2) INCONVENIENT TO THE GENERAL PUBLIC AND GOVERNMENT EMPLOYEES AND/OR ARE NOT READILY ACCESSIBLE BY PUBLIC AND/OR PRIVATE TRANSPORTATION. (ALSO SEE SCHEDULE B, PART II, PARAGRAPH 1.)

SUBPARAGRAPH (A), PARAGRAPH 2 OF SCHEDULE A, PART II OF THE GENERAL PROVISIONS PROVIDED:

"/A) THE GOVERNMENT RESERVES THE RIGHT IN EVALUATING BIDS TO TAKE INTO CONSIDERATION A COMPARISON OF ALL FACTORS WHICH INVOLVE OPERATING COSTS AS THEY RELATE TO THE PROPERTIES OFFERED. INCREASED OPERATING COSTS TO AND FROM THE PERIMETER OF THE NATIONAL INSTITUTE OF HEALTH FOR COMMUNICATIONS, MESSENGER SERVICE, CONSULTATION, TRAVEL, PROTECTION AND SECURITY AS THEY PERTAIN TO THE LOCATION OF EACH PROPERTY OFFERED COMPARED TO THE OTHER PROPERTIES OFFERED ARE EXAMPLES OF SOME FACTORS, IN ADDITION TO BASIC PRICES BID, TO BE USED IN ARRIVING AT A DETERMINATION OF THAT RESPONSIVE BID, CONFORMING TO THIS INVITATION FOR BIDS, WHICH WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT.'

PARAGRAPH 6, SCHEDULE A, PART II, PROVIDED:

"THE SUCCESSFUL BIDDER WILL BE REQUIRED TO FURNISH A PERFORMANCE BOND IN A PENAL SUM EQUAL TO THE TOTAL RENTALS BID AND ACCEPTED FOR THE FIRST YEAR OF THE LEASE TERM. THIS PERFORMANCE BOND, (S.F. 25), APPROPRIATELY ADAPTED TO THE SATISFACTION OF THE GOVERNMENT, SHALL BE SUBMITTED FOR THE SOLE PURPOSE OF INSURING THAT THE SUCCESSFUL BIDDER WILL DELIVER THE SPACE IN ACCORDANCE WITH THE CONTRACT (LEASE) PROVISIONS AND WITHIN THE DELIVERY TIME SPECIFIED HEREIN AND THEREIN.'

YOUR PROTEST AGAINST REJECTION OF ALL THE BIDS UNDER THE ORIGINAL INVITATION IS MADE ON THE GENERAL BASIS THAT THERE WERE NO GOOD AND COGENT REASONS THEREFOR. THE PRIMARY REASONS FOR SUCH CONCLUSION AS SET FORTH IN YOUR LETTER OF JANUARY 2, 1964, ARE SUMMARIZED IN YOUR LETTER OF APRIL 28, AS FOLLOWS:

"I. NO COGENT REASONS EXISTED FOR THE CANCELLATION OF BIDS UNDER THE ORIGINAL INVITATION AND READVERTISEMENT. THE FACTS WILL SHOW THAT THE BID OF INTERCONTINENTAL INNS, INC., WAS NOT ONLY THE LOW RESPONSIVE BID, AS ADMITTED BY GSA, BUT BASED ON DATA PRESENTED IN THE ADMINISTRATIVE REPORTS AS SUPPLEMENTED HEREIN, THE BID OF INTERCONTINENTAL INNS, INC. WAS THE LOW BID, ALL FACTORS OF ULTIMATE COST TO THE GOVERNMENT BEING PROPERLY CONSIDERED.

"II. THE PROVISIONS OF THE SECOND INVITATION, WITH RESPECT TO THE EVALUATION OF OTHER FACTORS, WERE LEGALLY DEFECTIVE IN THAT BIDDERS LACKING OBJECTIVE CRITERIA COULD NOT FIX THEIR PRICES, AND NO MINIMUM CRITERIA WAS SPECIFIED FORMING A BASIS FOR OBTAINING COMPETITIVE BIDS UNDER THE COMPETITIVE BIDDING STATUTES.

"III. THE GENERAL SERVICES ADMINISTRATION, THROUGH PRESSURE FROM THE NATIONAL INSTITUTES OF HEALTH, CANCELLED BIDS ON THE ORIGINAL INVITATION ON THE BASIS OF SAVINGS NOT REPRESENTING TRUE COST TO THE GOVERNMENT AND SOUGHT IN THE READVERTISEMENT TO ACHIEVE, THROUGH ADVERTISED BIDDING, THE OBJECTIVE WHICH COULD ONLY BE ACHIEVED THROUGH NEGOTIATION--- NAMELY, AN AWARD OF THE LEASE TO A FIRM IN THE BETHESDA AREA AS OPPOSED TO THE SILVER SPRING AREA.

"IV. THE GENERAL SERVICES ADMINISTRATION HAS MADE A MOCKERY OF THE COMPETITIVE BID SYSTEM SINCE INTERCONTINENTAL INNS WAS LOW, RESPONSIVE AND RESPONSIBLE BIDDER UNDER BOTH INVITATIONS AS WILL BE SET FORTH HEREIN, AND HAS NOT BEEN ABLE TO RECEIVE AN AWARD.'

THE INVITATION ISSUED ON AUGUST 19, 1963, FOR THIS PROCUREMENT WAS IN ACCORDANCE WITH THE ADVERTISING REQUIREMENT OF SECTION 302 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, AS AMENDED (41 U.S.C. 252), AND SECTION 303 (B) (41 U.S.C. 253 (B) (, PROVIDING THAT "AWARD SHALL BE MADE WITH REASONABLE PROMPTNESS BY WRITTEN NOTICE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED" SUBJECT HOWEVER, TO THE CONCLUDING PROVISO "THAT ALL BIDS MAY BE REJECTED WHEN THE AGENCY HEAD DETERMINES IT IS IN THE PUBLIC INTEREST SO TO DO.' ALSO, IN THIS INSTANCE BIDDERS WERE INSTRUCTED THAT "THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY AND ALL BIDS RECEIVED.' CONSISTENTLY HAS BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED. SEE O-BRIEN V. CARNEY, 6 F.SUPP. 761 AND COLORADO PAVING COMPANY V. MURPHY, 78 F. 28.

THE AUTHORITY TO REJECT BIDS IN THE PUBLIC INTEREST IS DELEGABLE TO SUBORDINATE OFFICIALS, AND ALTHOUGH IT SHOULD NOT BE EXERCISED ARBITRARILY OR IN SUCH A WAY AS TO PREJUDICE OR DISCRIMINATE AGAINST ANY LEGITIMATE BIDDER, IT CONFERS SUCH A BROAD ADMINISTRATIVE DISCRETION THAT OUR OFFICE CANNOT PROPERLY INTERFERE WITH ITS EXERCISE EXCEPT UPON A CLEAR SHOWING THAT THE ACTION TAKEN COULD NOT BE JUSTIFIED BY ANY REASONABLE EVALUATION OR INTERPRETATION OF THE PERTINENT FACTS AND CIRCUMSTANCES. CONSIDERING SUCH CASES WE HAVE RECOGNIZED THAT CONTRACTING OFFICERS ARE AGENTS OF AND ARE REQUIRED TO WORK IN THE BEST INTERESTS OF THE GOVERNMENT AND THAT THEIR ACTIONS IN REJECTING BIDS MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY. COMPARE 38 COMP. GEN. 235 AND 39 ID. 86. COPIES OF GSA'S REPORTS DATED DECEMBER 6, 1963, AND MARCH 12, 1964, WERE PREVIOUSLY FURNISHED YOU AND YOU HAVE TAKEN ISSUE WITH THE FINDINGS AND CONCLUSIONS THEREIN.

CONCERNING YOUR ARGUMENT NO. I, IN THE PRESENT CASE, THE READVERTISEMENT WAS CONSIDERED NECESSARY TO APPRISE ALL PROSPECTIVE BIDDERS OF THE KNOWN FACTORS THAT WOULD BE TAKEN INTO CONSIDERATION IN EVALUATING THE BIDS AND TO REQUIRE THE FURNISHING OF A PERFORMANCE BOND. WITH RESPECT TO YOUR STATEMENT THAT INTERCONTINENTAL WOULD HAVE BEEN WILLING TO FURNISH A PERFORMANCE BOND AND TO ENTER INTO A CONTRACT FOR A LESSER AMOUNT OF SPACE, GSA HAS PROPERLY POINTED OUT THAT THIS WOULD NOT HAVE DISPOSED OF THE QUESTION OF ADDITIONAL COSTS TO THE GOVERNMENT INCIDENT TO THE FURNISHING OF GUARD, TELEPHONE AND TRANSPORTATION SERVICE.

AS TO ARGUMENT NO. II, IT IS OBVIOUS WHAT BIDDERS COULD NOT BE APPRISED OF THE DOLLAR VALUE OF SUCH FACTORS AS TRANSPORTATION FROM NIH TO THE SITE OF THE LEASED QUARTERS SINCE GSA DID NOT KNOW AT THE TIME OF THE ISSUANCE OF THE SECOND INVITATION FOR BIDS WHAT BUILDINGS WOULD BE OFFERED. CANNOT BE SERIOUSLY DISPUTED, HOWEVER, THAT SUCH COSTS AS INCREASED COSTS FOR GUARD SERVICE, TELEPHONE AND TRANSPORTATION SERVICES WOULD ULTIMATELY HAVE TO BE BORNE BY THE GOVERNMENT AND THAT THEREFORE SUCH COSTS PROPERLY MAY BE USED IN EVALUATING THE BIDS. IN THIS REGARD, THE RULES OF COMPETITIVE BIDDING REQUIRE THAT BIDS BE EVALUATED ON A COMMON BASIS WHICH IS PRESCRIBED IN THE INVITATION. 40 COMP. GEN. 160, 161, CITING 10 ID. 261 AND 38 ID. 550. OTHERWISE, BIDDERS COULD NOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW, SINCE THEY WOULD NOT KNOW IN ADVANCE THE BASIS UPON WHICH THEIR BIDS WOULD BE EVALUATED. 36 COMP. GEN. 380. IN THIS INSTANCE, YOU RECOGNIZED THAT THE INVITATION SHOULD STATE THE BASIS UPON WHICH THE EVALUATION FOR THE PURPOSE OF AWARD SHOULD BE MADE SINCE YOU STATED ON PAGE EIGHT OF YOUR LETTER OF APRIL 28, 1964, THAT ON NOVEMBER 7, 1963 PRIOR TO CANCELLATION OF THE FIRST INVITATION YOU URGED GSA "NOT TO CONSIDER SUCH CRITERIA (INCREASED OPERATING COSTS TO AND FROM THE PERIMETER OF NIH SUCH AS COMMUNICATIONS, CONSULTATION TRAVEL, PROTECTION AND SECURITY) IN THE EVALUATION SINCE THE INVITATION ITSELF DID NOT PROVIDE FOR THE EVALUATION OF THESE FACTORS AND THE BASIS UPON WHICH EVALUATION WOULD BE MADE.' THE ABSENCE OF THOSE EVALUATION FACTORS IN THE ORIGINAL INVITATION WAS THE PRIMARY REASON FOR READVERTISING. IT IS THEREFORE APPARENT THAT IF THE FACTORS OF ADDITIONAL COST TO THE GOVERNMENT INCIDENT TO THE FURNISHING OF GUARD, TELEPHONE AND TRANSPORTATION SERVICE WERE TO BE CONSIDERED IN MAKING THE AWARD A RESOLICITATION WOULD BE REQUIRED. WHILE YOU NOW DISPUTE THE CORRECTNESS OF THE COMPUTATIONS MADE PRIOR TO THE DETERMINATION TO READVERTISE AND REFER TO THE ECONOMIC AND OPERATIONAL CRITERIA USED AS SPECULATIVE AND LACKING OBJECTIVITY, THE FACT REMAINS THAT THE READVERTISEMENT WAS JUSTIFIED BY REASON OF THE ABSENCE OF SUCH EVALUATION FACTORS IN THE ORIGINAL INVITATION.

AS TO ARGUMENT NO. III, GSA HAS REPORTED THAT THE DECISION TO READVERTISE WAS BASED ON CONSIDERATIONS COMPLETELY UNRELATED TO THE EXCLUSION OF ALL SITES OTHER THAN THE WASHINGTON SCIENCE CENTER LOCATED IN THE BETHESDA AREA. WITH RESPECT TO YOUR CONTENTION THAT THE CANCELLATION OF BIDS UNDER THE ORIGINAL INVITATION WAS MADE ON THE BASIS OF SAVINGS NOT REPRESENTED AS TRUE COSTS TO THE GOVERNMENT, GSA HAS REPORTED THAT FACTORS WHICH INCREASE THE ACTUAL COST TO THE GOVERNMENT AND WHICH ARE OVER AND ABOVE THE AMOUNT TO BE PAID TO A BIDDER UPON ACCEPTANCE OF ITS BID ARE NO LESS REAL, TANGIBLE AND OBJECTIVE THAN THE ACTUAL RENTAL AND COST OF UTILITIES AS PROPOSED BY THE BIDDER; THAT THE ADDED COSTS OF GUARD SERVICE, TELEPHONE SERVICE, AND TRANSPORTATION WHICH WOULD BE INCURRED IN THE LEASING OF ONE SITE AS OPPOSED TO ANOTHER ARE NOT MERE REFLECTIONS OF BIAS OR PREJUDICE, BUT ARE FACTORS WHICH CAN BE REDUCED TO DOLLAR AND CENTS COMPUTATIONS WHEN APPLIED TO GIVEN AND KNOWN SITES; AND THAT SUCH FACTORS PROPERLY SHOULD BE TAKEN INTO CONSIDERATION BY GSA IN LEASING SPACE FOR GOVERNMENT OCCUPANCY. GSA HAS STATED THAT FOR THE FOREGOING REASONS THE FIRST INVITATION WAS CANCELLED AND A REVISED INVITATION WAS ISSUED BASED ON INFORMATION THAT CAME TO ITS ATTENTION FOLLOWING OPENING OF THE ORIGINAL BIDS.

AS TO ARGUMENT NO. IV, AFTER A REVIEW OF THE ENTIRE RECORD IN THIS CASE WE FIND NO BASIS FOR HOLDING THAT THE REJECTION OF ALL BIDS RECEIVED UNDER THE ORIGINAL INVITATION WAS NOT AN EXERCISE OF PROPER ADMINISTRATIVE DISCRETION VESTED IN THE ADMINISTRATOR OR HIS DELEGATED SUBORDINATE OFFICIALS OR FOR HOLDING THAT SUCH ACTION WAS NOT BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WOULD BEST BE SERVED THEREBY. FURTHERMORE, SINCE THE BUILDING OFFERED TO BE FURNISHED BY YOU WOULD HAVE INVOLVED NEW CONSTRUCTION THE RESTRICTIVE PROVISION CONTAINED IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1964 (PUBLIC LAW 88-215), 77 STAT. 436-437, HEREINAFTER QUOTED WOULD PRECLUDE ANY AWARD TO YOUR CLIENT IN THE ABSENCE OF PROSPECTUS APPROVAL AS REQUIRED BY THAT STATUTE.

WITH RESPECT TO THE SECOND INVITATION (NO. GS-PRS-03-595), IT IS UNDERSTOOD THAT YOUR BID (EXTENDED ON APRIL 20, 1964, FOR AN ADDITIONAL 30 DAYS) IS THE ONLY ONE OPEN FOR ACCEPTANCE AT THIS TIME SINCE ALL OTHER BIDS, INCLUDING THAT OF WASHINGTON SCIENCE CENTER CONDUIT, INC., AUTOMATICALLY EXPIRED ON APRIL 30, 1964. SINCE THIS IS SO, IT IS UNNECESSARY TO PASS ON YOUR CLIENT'S PROTEST AGAINST THE PROPOSED AWARD TO WASHINGTON SCIENCE CENTER CONDUIT, INC., BECAUSE OF THE EVALUATION FACTORS INCORPORATED IN PARAGRAPH 2, PART II, SCHEDULE A OF THE GENERAL PROVISIONS OF THE SECOND INVITATION.

WE HAVE NOT BEEN OFFICIALLY ADVISED AS TO WHAT ACTION GENERAL SERVICES ADMINISTRATION PROPOSES TO TAKE WITH RESPECT TO YOUR PENDING BID. IN THIS REGARD, HOWEVER, EVEN IF IT SHOULD BE CONCLUDED THAT ACCEPTANCE OF YOUR BID UNDER THE SECOND INVITATION RATHER THAN RESOLICITATION WOULD BE IN THE PUBLIC INTEREST AFTER CONSIDERATION OF PRICES OFFERED BY THE EXPIRED BIDS, SINCE THE BUILDING OFFERED BY YOUR CLIENT WOULD INVOLVE NEW CONSTRUCTION THERE NECESSARILY WOULD BE FOR CONSIDERATION THE RESTRICTIVE PROVISION CONTAINED IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1964 (PUBLIC LAW 88-215), 77 STAT. 436-437, AS FOLLOWS:

"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 $200,000 OR FOR PAYMENT OF 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 AND APPROVED BY THE APPROPRIATE COMMITTEES OF THE CONGRESS IN THE SAME MANNER AS FOR PUBLIC BUILDINGS CONSTRUCTION PROJECTS PURSUANT TO THE PUBLIC BUILDINGS ACT OF 1959.'

IT IS UNDERSTOOD THAT A SIMILAR LIMITATION IS INCLUDED IN THE PENDING INDEPENDENT OFFICES APPROPRIATION BILL FOR 1965.

IN THE CIRCUMSTANCES, ANY AWARD THAT MIGHT BE MADE FOR THE BUILDING PROPOSED IN YOUR CLIENT'S BID ON THE SECOND INVITATION WOULD BE REQUIRED TO BE REGARDED AS IN CONTRAVENTION OF THE ABOVE APPROPRIATION LIMITATION IN THE ABSENCE OF PROSPECTUS APPROVAL AS PROVIDED IN THE STATUTE.