Protest of GSA Contract Award

B-195501: May 23, 1980

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A partnership protested the award of a contract to another partnership for the lease of a building to house a federal agency. The protester raised several grounds of protest, the main ones considered being: (1) the General Services Administration (GSA) misconstrued and erroneously applied Executive Order 12072 to the procurement in choosing the central business district for the location of office space needed to serve a predominantly rural area; (2) the application of the Executive Order's national urban policy was improper because it exceeds the President's authority to prescribe procurement policy; (3) the contract awarded was not valid because the offer was made by the partnership and one of the partners died before GSA accepted the offer; and (4) the contract was invalid because it violated the Economy Act of 1932 which sets limits on the amount of money the government may spend for alterations, modifications, and repairs of leased space and on the annual rental which may be paid for leased property. GAO held that, although untimely, the contention that the President exceeded his authority by issuing the national policy of locating federal facilities in centralized business areas when filling office space needs, would be considered since it was a significant issue to procurement practices and procedures. The President did not exceed his authority in establishing the policy since the long-term effect is intended to promote economy and efficiency throughout the government. GAO also held that the submission of an offer for a government contract creates an obligation which is not revoked by the death of a partner where the partnership liabilities were not discharged upon the death and the remaining partner and the deceased partner's son were willing and able to perform the contract. Finally, since the government was only to pay repair and alteration costs indirectly, insofar as the lessor would use the rent received for such improvements, and the rent to be paid did not violate the Economy Act limitation, the limitation was not applicable to the procurement. On these and other grounds, the protest was dismissed in part and denied in part.