B-175367, APR 14, 1972, 51 COMP GEN 645

B-175367: Apr 14, 1972

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IS A LEGAL INVITATION. EVEN THOUGH IT IS SUGGESTED FUTURE CONSTRUCTION SOLICITATIONS IDENTIFY THOSE FACTORS THAT WILL BE CONSIDERED IN SELECTING THE SHORTER OR LONGER COMPLETION DATE. THE AWARD OF A CONTRACT TO THE LOW BIDDER ON THE BASIS OF PRICE ON THE EARLIER COMPLETION DATE WAS PROPER SINCE THE INVITATION PROVIDED FOR AWARD ON THE BASIS OF PRICE AND OTHER FACTORS. EARLIER AVAILABILITY OF SPACE TO ACCOMMODATE PROGRAM AND STAFF EXPANSIONS - ARE COSTS THAT ARE TOO INTANGIBLE TO EVALUATE. AS IS THE PROVISION FOR THE ASSESSMENT OF LIQUIDATED DAMAGES. THE FOLLOWING FACTS ARE PERTINENT TO OUR CONSIDERATION. EACH IS SUBJECT TO LIQUIDATED DAMAGES AT A RATE OF $2. IS CONCERNED. THERE IS NO DIFFERENCE BETWEEN THE TWO SCHEDULES.

B-175367, APR 14, 1972, 51 COMP GEN 645

BIDS - EVALUATION - FACTORS OTHER THAN PRICE - INTANGIBLE ECONOMIC FACTORS AN INVITATION FOR BUILDING CONSTRUCTION WHICH ALTHOUGH IT DID NOT SPELL OUT SPECIFIC CRITERIA FOR THE SELECTION OF EITHER BID NO. 1, PROVIDING FOR COMPLETION IN 1,095 CALENDAR DAYS, OR BID NO. 2, COMPLETION IN 870 DAYS, IS A LEGAL INVITATION, EVEN THOUGH IT IS SUGGESTED FUTURE CONSTRUCTION SOLICITATIONS IDENTIFY THOSE FACTORS THAT WILL BE CONSIDERED IN SELECTING THE SHORTER OR LONGER COMPLETION DATE, AND THE AWARD OF A CONTRACT TO THE LOW BIDDER ON THE BASIS OF PRICE ON THE EARLIER COMPLETION DATE WAS PROPER SINCE THE INVITATION PROVIDED FOR AWARD ON THE BASIS OF PRICE AND OTHER FACTORS, AND THE "OTHER FACTORS" - RENTAL SPACE SAVINGS, GAIN IN OPERATING EFFICIENCY, AND EARLIER AVAILABILITY OF SPACE TO ACCOMMODATE PROGRAM AND STAFF EXPANSIONS - ARE COSTS THAT ARE TOO INTANGIBLE TO EVALUATE, AS IS THE PROVISION FOR THE ASSESSMENT OF LIQUIDATED DAMAGES.

TO THE ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, APRIL 14, 1972:

BY LETTER, WITH ENCLOSURES, DATED MARCH 29, 1972, YOUR GENERAL COUNSEL FURNISHED OUR OFFICE A REPORT ON THE PROTEST OF THE GEORGE HYMAN CONSTRUCTION COMPANY AGAINST THE PROPOSED AWARD OF A CONTRACT TO BLAKE CONSTRUCTION CO., INC., UNDER INVITATION FOR BIDS NO. GS-03B 17070, FOR CONSTRUCTION OF THE SOUTH PORTAL BUILDING, WASHINGTON, D.C. ON APRIL 7 AND 10, 1972, WE RECEIVED SUPPLEMENTAL REPORTS FROM YOUR ASSISTANT GENERAL COUNSEL, PUBLIC BUILDINGS DIVISION.

THE FOLLOWING FACTS ARE PERTINENT TO OUR CONSIDERATION. THE INVITATION, AS AMENDED, REQUESTED BIDS ON THE BASIS OF TWO DIFFERENT COMPLETION DATES. BID NO. 1 CALLS FOR COMPLETION OF THE BUILDING IN 1,095 CALENDAR DAYS WHILE BID NO. 2 CALLS FOR COMPLETION IN 870 CALENDAR DAYS. EACH IS SUBJECT TO LIQUIDATED DAMAGES AT A RATE OF $2,800 FOR EACH DAY OF DELAY IN COMPLETION. INSOFAR AS THE ACTUAL WORK, INCLUDING ADDITIVE AND DEDUCTIVE ALTERNATES, IS CONCERNED, THERE IS NO DIFFERENCE BETWEEN THE TWO SCHEDULES. THE INVITATION DOES NOT CONTAIN AN EXPRESSION OF PREFERENCE FOR EITHER COMPLETION TIME. PARAGRAPH 13 OF THE SPECIAL CONDITIONS, ENTITLED "BASIS OF AWARD," PROVIDES THAT:

13.1 THE GOVERNMENT RESERVES THE RIGHT TO ACCEPT THE BID NO. 1 OR BID NO. 2; THE RIGHT TO ACCEPT OR REJECT THE BIDS ON THE ALTERNATES RELATED TO BID NO. 1 AND BID NO. 2; AND THE RIGHT TO ACCEPT OR REJECT THE BID ON UNIT PRICE - FOUNDATION PILE RELATED TO BID NO. 1 AND BID NO. 2.

AND, PARAGRAPH 10(A) OF STANDARD FORM 22 (OCTOBER 1969 EDITION) STATES:

10. AWARD OF CONTRACT. (A) AWARD OF CONTRACT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

WE ARE INFORMED THAT NEITHER HYMAN NOR BLAKE RAISED ANY QUESTION CONCERNING THE BASIS TO BE USED BY GSA IN DETERMINING WHICH COMPLETION TIME TO ACCEPT PRIOR TO FEBRUARY 15, 1972, THE BID OPENING DATE. WE WERE ALSO ADVISED BY GSA THAT NONE OF THE THREE OTHER RESPONDING BIDDERS RAISED ANY QUESTION.

TAKING INTO ACCOUNT THE VARIOUS ADDITIVE AND DEDUCTIVE ALTERNATES THE GENERAL COUNSEL'S LETTER OF MARCH 29, 1972, REPORTS THE FOLLOWING PRICES FOR HYMAN AND BLAKE:

BID NO. 1 BID NO. 2

(1,095 DAYS) (870 DAYS)

BLAKE$29,868,000 $31,053,000

HYMAN 30,451,500 30,451,500

THUS, BLAKE'S BID ON THE LONGER COMPLETION PERIOD IS $583,500 LESS THAN HYMAN'S BID FOR BOTH THE LONG AND SHORT TERM COMPLETION DATE. GSA PROPOSES TO AWARD THE CONTRACT ON THE BASIS OF BLAKE'S BID NO. 1.

AT THE OUTSET, WE MUST OBSERVE THAT NO ONE HAS URGED THAT THE INVITATION IS LEGALLY DEFICIENT FROM THE STANDPOINT OF AFFORDING ALL BIDDERS AN EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS. AS THE INVITATION IS STRUCTURED, A BIDDER HAS THE OPPORTUNITY TO COMPETE AGAINST OTHER BIDDERS FOR AN AWARD UNDER EITHER COMPLETION SCHEDULE. MOST IMPORTANTLY, THE REQUEST FOR BIDS ON DEFINITE DELIVERY SCHEDULES PERMITS A BIDDER TO ACCURATELY ASSESS IN EACH INSTANCE THE IMPACT OF PERFORMANCE TIME ON HIS BID PRICE.

ADMITTEDLY, NO SPECIFIC CRITERIA ARE SPELLED OUT FOR THE EXERCISE OF THE OPTION TO AWARD ON THE BASIS OF BID NO. 1 OR BID NO. 2. IT IS GSA'S POSITION - ONE SHARED BY HYMAN'S COUNSEL - THAT THE LANGUAGE OF PARAGRAPH 10(A) OF STANDARD FORM 22 AND THE CLEAR LANGUAGE OF PARAGRAPH 13.1 OF THE SPECIAL CONDITIONS AUTHORIZE THE ACCEPTANCE OF THE LOWEST BID FOR THE SHORTER COMPLETION DATE IF SUCH ACTION IS MOST ADVANTAGEOUS TO THE GOVERNMENT, NOTWITHSTANDING THAT THE BID IS HIGHER THAN THE LOW BID ON THE LONGER COMPLETION SCHEDULE. BLAKE'S COUNSEL, HOWEVER, CONTENDS THAT PRICE ALONE MUST CONTROL SINCE NO "OTHER FACTORS" ARE SPELLED OUT. IN SUPPORT OF THIS POSITION, ATTENTION IS DRAWN TO OUR DECISIONS REQUIRING THE IDENTIFICATION OF FACTORS OTHER THAN PRICE IF THEY ARE TO BE CONSIDERED IN THE EVALUATION OF BIDS. SEE, E.G., 50 COMP. GEN. 447, 454 (1970). DELIVERY TIME IS, OF COURSE, AN "OTHER FACTOR" AND, IN ORDER FOR US TO CONCLUDE THAT BIDDERS WERE NOT PLACED ON NOTICE THAT THE ADVANTAGES, IF ANY, OF EARLIER COMPLETION WOULD BE WEIGHED IN DETERMINING THE MOST ADVANTAGEOUS AWARD, WE WOULD HAVE TO IGNORE THE OPTION PROVISIONS OF PARAGRAPH 13.1 - THE PURPOSE OF WHICH IS TO PERMIT AN ELECTION OF ALTERNATE DELIVERY SCHEDULES. INDEED, THE LANGUAGE WOULD BE SURPLUSAGE IF COUNSEL FOR BLAKE'S POSITION WERE ADOPTED.

MOREOVER, THE FAILURE TO IDENTIFY THE CONSIDERATIONS WHICH WOULD PROMPT AN ELECTION OF THE EARLIER COMPLETION DATE DOES NOT, IN OUR VIEW, AFFECT THE LEGAL SUFFICIENCY OF THE INVITATION. ALL BIDDERS WERE ABLE TO PREPARE THEIR BIDS IN LIGHT OF THE POSSIBILITY THAT GSA MIGHT ELECT EITHER COMPLETION DATE. FURTHER, ANY QUESTIONS OR OBJECTIONS CONCERNING THE SPECIFIC BASIS UPON WHICH GSA WOULD MAKE THE ELECTION SHOULD HAVE BEEN VOICED NO LATER THAN BID OPENING.

WITH RESPECT TO THE PROPOSED AWARD, HYMAN'S COUNSEL URGES IN ITS SUBMISSION OF MARCH 13, 1972, THAT AN AWARD TO BLAKE WOULD BE A GROSS ABUSE OF DISCRETION BECAUSE SUCH ACTION WOULD RESULT IN A SUBSTANTIAL FINANCIAL LOSS TO THE GOVERNMENT. SPECIFICALLY, IT IS URGED THAT IF GSA ELECTED TO ACCEPT HYMAN'S BID ON THE EARLIER COMPLETION DATE, THE SAVINGS IN RENTAL PAYMENTS ACCRUING TO GSA BY VIRTUE OF OBTAINING THE BUILDING 7 1/2 MONTHS EARLIER WOULD MORE THAN OFFSET THE $583,500 PRICE ADVANTAGE IN FAVOR OF BLAKE. TO THIS END, COUNSEL HAS SUBMITTED COMPUTATIONS SHOWING RENTAL SAVINGS RANGING FROM A MAXIMUM OF $1,183,943 TO A MINIMUM OF $720,617.

AS AN ALTERNATIVE APPROACH TO THE QUESTION, IT IS URGED THAT THE LIQUIDATED DAMAGES OF $2,800 PER DAY REFLECT GSA'S OWN EVALUATION OF THE VALUE OF HAVING THE SPACE EARLIER. USING THIS METHOD OF VALUING THE SPACE, COMPLETION 225 DAYS EARLIER WOULD BE WORTH $630,000, MORE THAN ENOUGH TO OFFSET BLAKE'S PRICE ADVANTAGE.

GSA, IN REPLY, REJECTS THE PROPOSITION THAT THERE WILL BE AN ACTUAL SAVINGS IN RENT OR THAT THE LIQUIDATED DAMAGES ARE AN APPROPRIATE MEASURE OF THE VALUE OF THE SHORTER COMPLETION DATE. IN THIS REGARD, THE LETTER EVIDENCES A RESTRICTIVE VIEW OF GSA'S DISCRETION IN ELECTING THE SHORTER COMPLETION DATE. THE GENERAL COUNSEL TAKES THE POSITION THAT "PRICE AND NOT TIME WAS STRESSED IN THE IFB AS THE MOST IMPORTANT FACTOR IN MAKING AN AWARD *** PARAGRAPH 10(A) ALERTED BIDDERS THAT THE GOVERNMENT WOULD BASE ITS AWARD ON PRICE, ALTHOUGH OTHER FACTORS WOULD BE CONSIDERED." EVIDENCE THAT TIME IS NOT CONTROLLING, THE GENERAL COUNSEL POINTS TO THE FAILURE OF THE INVITATION TO SPECIFY A PREFERENCE FOR THE SHORTER COMPLETION TIME. IN ADDITION, WE ARE ADVISED THAT BY REQUESTING SEPARATE BIDS, GSA SOUGHT TO DETERMINE IF THERE WOULD BE A PREMIUM FOR A SHORTER COMPLETION DATE SO THAT IF THE BUILDING WERE NEEDED SOONER, IT COULD DECIDE TO AWARD FOR A SHORTER PERIOD.

SIGNIFICANTLY, IN JUDGING THE VALUE OF EARLIER COMPLETION AS OPPOSED TO BLAKE'S LOWER PRICE, GSA HAS CONFINED ITSELF TO A CONSIDERATION OF ONLY THOSE FACTORS WHICH IT BELIEVES NOW CAN BE QUANTIFIED WITH REASONABLE CERTAINTY.

INSOFAR AS RENTAL SAVINGS ARE CONCERNED, A FEBRUARY 21, 1972, MEMORANDUM, ENTITLED "ECONOMIC EVALUATION - SOUTH PORTAL BUILDING - ABBREVIATED VERSUS EXPANDED CONSTRUCTION SCHEDULE," FROM THE DIRECTOR, SPACE MANAGEMENT DIVISION, PUBLIC BUILDINGS SERVICE, STATES, IN PERTINENT PART, THAT:

UNDER A PROSPECTUS APPROVED BY THE SENATE ON SEPTEMBER 20, 1966, AND BY THE HOUSE ON OCTOBER 6, 1966, THE SOUTH PORTAL BUILDING IS TO BE CONSTRUCTED TO CONCEAL THE LARGE VENTILATION TOWER OF THE SOUTH ENTRANCE OF THE MALL TUNNEL OF THE INNER LOOP FREEWAY AND TO PROVIDE NEEDED OFFICE SPACE FOR THE DEPARTMENTAL HEADQUARTERS OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW).

ONLY THE AGENCY SPACE HAS BEEN CONSIDERED IN THIS ANALYSIS, SINCE SERVICE AREAS AND PARKING SPACES ARE ANCILLARY TO THE GENERAL PURPOSE SPACE WHICH WILL HOUSE AGENCY PERSONNEL AND WOULD NOT, THEREFORE, OTHERWISE BE REQUIRED. WHILE THIS PREMISE MIGHT BE QUESTIONED WITH RESPECT TO THE PARKING AREA, LET IT SUFFICE TO SAY THAT ALTHOUGH PARKING FACILITIES ARE CONSIDERED TO BE NECESSARY IN A NEW STRUCTURE IN ORDER TO ALLEVIATE CONGESTION, RETAIN EMPLOYEES, ETC., IN THE ABSENCE OF SUCH FACILITIES, EMPLOYEES SIMPLY DO WITHOUT OR MAKE OTHER ARRANGEMENTS ON A PERSONAL BASIS; THEREFORE, THERE IS NO ECONOMIC IMPACT ON THE GOVERNMENT WHETHER THE PARKING IS AVAILABLE NOW OR SEVEN AND ONE-HALF MONTHS FROM NOW.

AS PREVIOUSLY NOTED, THE SOUTH PORTAL BUILDING WILL HOUSE THE DEPARTMENTAL HEADQUARTERS OF HEW. UNDER THE ORIGINAL PROSPECTUS, IT WAS ENVISIONED THAT THE RELOCATION OF THESE HEADQUARTERS ACTIVITIES FROM THE HEW NORTH BUILDING WOULD FREE-UP SUFFICIENT SPACE TO PERMIT THE CANCELLATION OR REASSIGNMENT OF 246,710 SQUARE FEET OF LEASED SPACE. HOWEVER, THE CONTINUALLY EXPANDING REQUIREMENTS OF HEW HAVE NECESSITATED THE LEASE ACQUISITION OF INCREASINGLY LARGER BLOCKS OF SPACE, INCLUDING THE RELATIVELY RECENT ACQUISITION OF THE PARKLAWN BUILDING IN ROCKVILLE, MARYLAND. THE LEASING OF THIS BUILDING ALLOWED FOR THE CONSOLIDATION AND EXPANSION OF A NUMBER OF HEW ACTIVITIES AND RESULTED IN THE CANCELLATION OR REASSIGNMENT OF MANY LEASED LOCATIONS PREVIOUSLY IDENTIFIED IN THE SOUTH PORTAL PROSPECTUS.

AN ANALYSIS OF THE PAST GROWTH OF HEW IN THE WASHINGTON METROPOLITAN AREA INDICATES THAT THIS DEPARTMENT IS AMONG THE THREE MOST RAPIDLY EXPANDING AGENCIES OF GOVERNMENT IN TERMS OF TOTAL SQUARE FOOTAGE, AVERAGING A NET GAIN OF BETWEEN 70,000-80,000 SQUARE FEET PER YEAR. BASED ON PENDING AND/OR APPROVED PROGRAMS, IT IS ANTICIPATED THAT THIS TREND WILL NOT ONLY CONTINUE, BUT ACCELERATE. IN VIEW OF THIS, IT IS ANTICIPATED THAT THE COMPLETION OF THE SOUTH PORTAL BUILDING WILL NOT RESULT IN THE CANCELLATION OR REASSIGNMENT OF ANY LEASED SPACE, FOR HEW WILL HAVE A CONTINUING NEED FOR THIS SPACE TO MEET FUTURE PROGRAM NEEDS. DUE TO THE CONTINUALLY CHANGING AND EXPANDING REQUIREMENTS OF THE HEW, PREVIOUSLY FORMULATED HOUSING PLANS HAVE BEEN NEGATED. FURTHER, PENDING AND/OR PROPOSED LEGISLATION PRECLUDES THE DEVELOPMENT OF A REALISTIC HOUSING PLAN AT THIS TIME. ***

UPON COMPLETION OF THE SOUTH PORTAL BUILDING, THE OFFICE OF THE SECRETARY, HEW, AND RELATED STAFF FUNCTIONS WILL OCCUPY THE 374,000 SQUARE FEET OF AGENCY SPACE, VACATING IN THE PROCESS APPROXIMATELY 300,000 SQUARE FEET OF SPACE IN THE HEW NORTH BUILDING. THE 74,000 SQUARE FEET DIFFERENCE BETWEEN THE AREA TO BE OCCUPIED AND THAT TO BE VACATED WILL BE UTILIZED TO RELIEVE EXISTING OVERCROWDING AND TO PROVIDE FOR ADMINISTRATIVE SUPPORT AREAS, SUCH AS CONFERENCE ROOMS, LIBRARIES, ETC., WHICH ARE CURRENTLY LACKING. THEREFORE, A DIFFERENCE IN DELIVERY TIME OF THE COMPLETED BUILDING WILL HAVE NO TANGIBLE MONETARY EFFECT ON THE OFFICE OF THE SECRETARY - RATHER, THE ADDITIONAL SEVEN AND ONE-HALF MONTHS WOULD NECESSITATE CONTINUED OPERATIONS IN A LESS THAN IDEAL SPACE SITUATION.

SIMILARLY, THE 300,000 SQUARE FEET TO BE VACATED IN THE HEW NORTH BUILDING WILL BE UTILIZED TO RELIEVE CONDITIONS IN OTHER AREAS OF HEW, TO SATISFY OUTSTANDING REQUESTS FOR SPACE EXTANT AT THAT TIME, AND TO PROVIDE RELIEF TO THE UNITED STATES INFORMATION AGENCY'S VOICE OF AMERICA (VOA) OPERATION, ALSO HEADQUARTERED IN THE HEW NORTH BUILDING.

WITH RESPECT TO THE LATTER, VOA HAS BEEN OPERATING UNDER INTOLERABLE CONDITIONS FOR A NUMBER OF YEARS. UNFORTUNATELY, THE PROGRAM NEEDS OF HEW AND VOA HAVE BEEN MUTUALLY EXCLUSIVE INSOFAR AS PROVIDING NECESSARY EXPANSION SPACE TO EITHER ACTIVITY IN THAT BUILDING. THE COST OF RELOCATING ENTIRELY OR THE COST AND INCONVENIENCE OF A SPLIT OPERATION HAVE RULED OUT BOTH ALTERNATIVES FOR VOA IN THE PAST, WITH THE ONLY REMAINING ALTERNATIVE BEING THE HOPE OF EVENTFUL RELIEF THROUGH RELOCATION OF THE HEW FUNCTION TO THE SOUTH PORTAL BUILDING. AT THAT TIME IT IS PROPOSED THAT VOA BE ASSIGNED A MINIMUM OF 40,000 SQUARE FEET OF THE VACATED SPACE. HERE AGAIN, THE TIMING OF DELIVERY OF THE NEW BUILDING AND SUBSEQUENT VACATING OF SPACE IN HEW NORTH IS A MATTER OF CONTINUED INCONVENIENCE TO VOA RATHER THAN A MATTER OF TANGIBLE SAVINGS.

AS INDICATED EARLIER, THE BALANCE OF THE SPACE TO BE VACATED IN HEW NORTH BUILDING WILL BE UTILIZED TO RELIEVE OVERCROWDING IN OTHER COMPONENTS OF HEW AND TO SATISFY REQUESTS PENDING AT THAT TIME. A SEVEN AND ONE-HALF MONTHS' DIFFERENTIAL WOULD NOT OBVIATE THE NEED TO LEASE SPACE OR RESULT IN CANCELLATION OF EXISTING LEASES. WITH THE KNOWLEDGE THAT DELIVERY OF THE NEW BUILDING IS IMMINENT, SUCH REQUIREMENTS WOULD SIMPLY BE HELD IN ABEYANCE.

IN SUMMARY, IT IS THE POSITION OF THIS OFFICE THAT COMPLETION OF THE SOUTH PORTAL BUILDING IN LATE 1974 OR SEVEN AND ONE-HALF MONTHS LATER WOULD HAVE NO APPRECIABLE MONETARY IMPACT ON THE GOVERNMENT AND THAT THE LATER DELIVERY WOULD ONLY CONSTITUTE AN INCONVENIENCE TO HEW AND VOA RATHER THAN NECESSITATE THE EXPENDITURE OF ADDITIONAL FUNDS FOR LEASED SPACE. CONVERSELY, THE EARLIER DELIVERY WOULD NOT RESULT IN SAVINGS THROUGH CANCELLATION OF LEASES OR BY OBVIATING THE NEED TO LEASE. IN ITS LETTER OF MARCH 31 AND AT THE CONFERENCE ON APRIL 3, HYMAN'S COUNSEL ASSERTED THAT GSA'S ASSESSMENT OF THE SITUATION WAS NOT CONCURRED IN BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW). WE WERE SUBSEQUENTLY FURNISHED A COPY OF A LETTER DATED APRIL 3, 1972, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION AND MANAGEMENT, HEW, TO THE COMMISSIONER, PUBLIC BUILDINGS SERVICE, "STRONGLY URGING)" AWARD ON THE BASIS OF THE EARLIER COMPLETION DATE. THE FOLLOWING BENEFITS OF SUCH A COURSE OF ACTION ARE ADVANCED: (1) RENTAL SAVINGS ON THE ORDER OF $1.25 MILLION RESULTING FROM THE RELEASE OF RENTAL SPACE NOW OCCUPIED BY HEW AND OTHER AGENCIES WHICH WILL BACKFILL DEPARTMENT-VACATED SPACE; (2) ELIMINATION OF OPERATING INEFFICIENCIES CAUSED BY DISPERSAL OF FACILITIES; (3) ANTICIPATED PROGRAM AND STAFF EXPANSION WHICH WILL INCREASE OVERCROWDING. BY LETTER DATED APRIL 7, 1972, THE ASSISTANT GENERAL COUNSEL RESPONDED TO OUR INFORMAL REQUEST FOR GSA'S EVALUATION OF HEW'S POSITION AS FOLLOWS:

1. COST SAVINGS

*** MANAGEMENT OF SPACE IS GSA'S FUNCTION AND HEW IS NOT FAMILIAR WITH THE OVERALL NEEDS OF THE GOVERNMENT. HEW'S ANALYSIS BASED SOLELY ON ITS OWN SITUATION IS NOT VALID. AS INDICATED IN *** (THE DIRECTOR'S) ANALYSIS, THE RATE OF INCREASE IN THE AMOUNT OF LEASED SPACE UNDER THE CONTROL OF THE GENERAL SERVICES ADMINISTRATION, APPROXIMATING SOME 62 PERCENT DURING THE PAST FOUR YEARS, WOULD ASSUREDLY PRECLUDE THE RELEASE OF SUCH SPACE EVEN THOUGH VACATED BY HEW. THEREFORE, NO SUCH SAVINGS WOULD ACCRUE TO THE GOVERNMENT AS A WHOLE. SECONDLY, AS ALSO INDICATED IN *** (THE DIRECTOR'S) MEMORANDUM, IT IS IMPOSSIBLE AT THIS EARLY DATE TO PREPARE A DEFINITIVE HOUSING PLAN FOR THE SOUTH PORTAL BUILDING DUE TO THE UNCERTAINTY CREATED BY NEW AND EXPANDING HEW PROGRAMS.

2. OPERATING EFFICIENCIES

WHILE WE DO NOT DISPUTE THE LOSS OF OPERATING EFFICIENCY ENGENDERED BY OVERCROWDING AND SPLIT LOCATIONS, THESE ARE INTANGIBLES AGAINST WHICH A SPECIFIC COST CANNOT BE ACCURATELY ASSESSED. IN FACT, THE MATTER OF INCONVENIENCE WAS RECOGNIZED IN *** (THE) MEMORANDUM.

3. STAFFING PROJECTIONS

HEW'S COMMENTS CONCERNING STAFFING SUPPORT, RATHER THAN NEGATE, GSA'S POSITION RELATIVE TO THE EXPANDING REQUIREMENTS FOR LEASED SPACE, THE UNCERTAINTY SURROUNDING THE ULTIMATE HOUSING PLAN FOR SOUTH PORTAL, AND THE UNLIKELIHOOD OF RELEASING SPACE CURRENTLY UNDER LEASE TO GSA.

WE AGREE WITH THE FOREGOING STATEMENT ESPECIALLY SINCE THE RESPONSIBILITY FOR THE CONSTRUCTION OF PUBLIC BUILDINGS AND THE ASSIGNMENT AND REASSIGNMENT OF SPACE IS VESTED IN THE ADMINISTRATOR OF GENERAL SERVICES BY THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT (40 U.S.C. 490 AND 601, ET SEQ.). IN OUR VIEW, GSA'S POSITION DOES NOT, AS HYMAN'S COUNSEL SUGGESTS, FAIL TO RECOGNIZE THAT THERE IS SOME VALUE IN SECURING THE SPACE AT AN EARLIER DATE. IT IS SIMPLY GSA'S POSITION THAT SUCH VALUE IS "INTANGIBLE" AND, THEREFORE, SHOULD NOT BE CONSIDERED.

RECOGNIZING THAT THE SELECTION OF THE ULTIMATE AWARDEE INVOLVES A CONSIDERABLE DEGREE OF DISCRETION, WE CANNOT SAY THAT GSA'S POSITION CONSTITUTES AN ABUSE OF DISCRETION. GSA'S APPROACH TO THE SELECTION - THAT IS, ITS UNWILLINGNESS TO RELY ON COST FACTORS THAT CANNOT BE DETERMINED WITH REASONABLE CERTAINTY - GENERALLY COMPORTS WITH OUR VIEW. 50 COMP. GEN., SUPRA; 47 ID. 233 (1967); 45 ID. 59 (1965); ID. 433 (1966); 36 ID. 380 (1956); AND 35 ID. 282 (1955).

SIMILARLY, THIS APPROACH IS REFLECTED IN GSA'S REJECTION OF THE LIQUIDATED DAMAGES RATE AS A BASIS FOR DELIVERY SELECTION. THE GENERAL COUNSEL EXPRESSES THE VIEW THAT "RELIANCE ON LIQUIDATED DAMAGES AS A MEASURE OF THE WORTH TO THE GOVERNMENT OF THE 7 1/2 MONTH DIFFERENCE IN COMPLETION TIMES IS NOT WHOLLY DETERMINATIVE OF THE REAL DIFFERENCE IN COST OF THE TWO CONTRACTS." WE AGREE AND ADD THAT LIQUIDATED DAMAGES, AS SUCH, ARE INAPPROPRIATE AS A MEASURE OF BID EVALUATION IN VIEW OF THE UNCERTAINTY IN PROJECTING THE TIMELINESS OF FUTURE CONTRACT PERFORMANCE AND DELIVERY.

ACCORDINGLY, WE CAN FIND NO LEGAL BASIS FOR INTERPOSING AN OBJECTION TO THE PROPOSED AWARD OF A CONTRACT TO BLAKE. WE DO, HOWEVER, SUGGEST THAT IT MIGHT BE DESIRABLE TO IDENTIFY IN FUTURE CONSTRUCTION SOLICITATIONS THOSE FACTORS THAT WILL BE CONSIDERED IN SELECTING THE SHORTER OR LONGER COMPLETION DATES.