B-228187.2, B-228188.2, Apr 7, 1988, 88-1 CPD 345

B-228187.2, B-228188.2, Apr 7, 1988, 88-1 CPD 345

PROCUREMENT - Specifications - Minimum needs standards - Leases DIGEST: Where the contracting agency improperly awarded a lease but cancellation of the lease before the end of the 1-year base period is not possible because the lease has no termination for convenience clause, the agency should not renew the lease, but instead should issue a new solicitation that accurately reflects its minimum needs.

Patio Pools of Sierra Vista, Inc.-- Reconsideration:

Patio Pools of Sierra Vista, Inc., requests that we modify the recommendation in our decision, Patio Pools of Sierra Vista, Inc., B-228187, et al., Dec. 31, 1987, 87-2 CPD Para. 650, in which we sustained the firm's protest of the award of a lease to a competitor under solicitation No. AZ-87-34. The solicitation was issued by the Army Corps of Engineers for office space at or in the vicinity of Sierra Vista, Arizona, to replace space destroyed by a fire at Fort Huachuca.

We hereby modify the recommendation.

We sustained the protest because the Corps improperly eliminated Patio Pools' lower-priced proposals (the award resulted from two solicitations) from consideration on the basis of factors-- distance from the Fort, travel time and expense, and the costs of communications services and automatic data processing (ADP) lines-- that were not in the solicitation. We noted, however, that since there was no termination for convenience clause in the awarded lease, termination of the lease was not a viable option. Instead, we found that Patio Pools was entitled to its protest and bid preparation costs.

Patio Pools contends that the termination for convenience clause is mandatory and should be read into the lease pursuant to G.L. Christian & Associates v. United States, 312 F.2d 418 (Ct. Cl. 1963), and the Federal Acquisition Regulation (FAR). Alternatively, Patio Pools requests that the Corps refrain from exercising the options under the lease and recompete the requirement in accordance with statutory and regulatory requirements.

Under the Christian doctrine, a clause that is required by a statutory procurement regulation will be read into an otherwise properly awarded contract to which the regulation applies. See 47 Comp.Gen. 682, 685 (1968). In other words, the Christian an doctrine operates to incorporate into a contract, as a matter of law, a clause that was required to have been included in a contract but was not. Here, however, we are not aware of any requirement in the regulations that a lease contain a termination for convenience clause. In this respect, we note that GSA's standard lease form (Standard Form 2), which was used for the lease in issue, does not include a termination for convenience provision. In the absence of such a requirement, there is no merit to the argument that the Christian doctrine would allow us to read a termination for convenience clause into the lease awarded here. Termination of the lease and reevaluation of proposals therefore is not a viable option.

We modify our decision, however, to recommend that the Corps not renew the lease after the first year, without further review of its minimum needs. In this respect, we recognized in our earlier decision that the Corps stated it required space within 1 mile of the Fort, based on travel time and expense and the additional costs of communications services and ADP lines, and that the space Patio Pools offered was farther away than that. The Corps has reiterated this position in commenting on Patio Pools' requests for reconsideration. There is no indication in the record on the protest or reconsideration request, however, of any analysis of travel costs or ADP-related costs associated with office space located within or beyond 1 mile of the Fort. Further, Patio Pools has refuted the Corps' contention with regard to the increase in communications cost by furnishing a letter from Mountain Bell, the provider of the services, which indicates that there would be no appreciable difference in the communications charges for the awardee's office space, located within 1 mile of Fort Huachuca, and Patio Pools' Highway 92 location, which is more than 1 milefrom the Fort. In this regard, when a procuring agency imposes a geographical restriction, it must provide prima facie support for its position that the restriction is necessary to meet its minimum needs when challenged by a protester. See Pamela A. Lambart, B-227849, Sept. 28, 1987, 87-2 CPD Para. 308.

Our prior decision is modified to include a recommendation that the Corps not renew the protested lease without further review in light of the above considerations. Patio Pools still is entitled to reimbursement for its protest and bid preparation costs, as we previously held. See 4 C.F.R. Sec. 21.6 (1987).