B-153036, FEB. 19, 1965

B-153036, FEB. 19, 1965

TO FIRST NATIONAL REALTY CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 23, 1964, AND LETTER OF NOVEMBER 2, 1964, FROM YOUR ATTORNEY, AND TO A CONFERENCE HELD IN OUROFFICE ON OCTOBER 29, 1964, WHICH CONCERNED YOUR ALLEGATIONS OF UNFAIRNESS AND IMPROPRIETY ON THE PART OF THE GENERAL SERVICES ADMINISTRATION IN THE HANDLING OF BIDS ON SEVERAL ACQUISITIONS OF LEASED OFFICE SPACE IN THE WASHINGTON, D.C. AREA. WE HAVE, AS REQUESTED, UNDERTAKEN A STUDY OF THE MATTERS DISCUSSED, AND HAVE OBTAINED A FULL REPORT FROM THE GENERAL SERVICES ADMINISTRATION IN CONNECTION THEREWITH. BECAUSE YOUR CHARGES AND ACCUSATIONS COVER MANY AND VARIOUS SOLICITATIONS AND TENANCIES WE WILL TREAT THE SUBJECT ACQUISITIONS IN CHRONOLOGICAL ORDER.

INVITATION FOR BIDS GS-PBS-03-562, ISSUED FEBRUARY 16, 1962, REQUESTED BIDS TO SUPPLY APPROXIMATELY 600,000 SQUARE FEET OF NEWLY CONSTRUCTED OR EXISTING OFFICE AND RELATED SPACE. THE INVITATION REQUIRED THE SUBMISSION OF A BID BOND ALONG WITH THE BID AND WARNED BIDDERS THAT FAILURE TO FURNISH THE BID GUARANTEE IN PROPER FORM MIGHT BE CAUSE FOR REJECTION OF THE BID. THE FIRST NATIONAL REALTY CORPORATION SUBMITTED THREE BIDS: TWO BIDS ON PROPERTY LOCATED IN THE BELT WAY SHOPPING CENTER AND ONE BID ON THE PREMISES LOCATED AT 14TH AND R STREETS, N.W. A FOURTH BID WAS SUBMITTED BY SIDNEY J. BROWN AND SARAH BROWN COVERING SPACE LOCATED AT FENTON AND BONIFANT STREETS IN SILVER SPRING, MARYLAND. ALL FOUR BIDS WERE REJECTED AS NONRESPONSIVE FOR FAILURE TO COMPLY WITH THE BID BOND REQUIREMENT.

OUR OFFICE HAD OCCASION TO REVIEW THE PROPRIETY OF THESE DETERMINATIONS IN A LETTER TO THE ADMINISTRATOR OF GENERAL SERVICES, B 149610, DATED DECEMBER 11, 1962, WHEREIN THE FOLLOWING OBSERVATIONS WERE MADE, AT PAGE THREE:

"SINCE THE EFFECTIVE DATE OF OUR DECISION AT 38 COMP. GEN. 532, WE HAVE CONSISTENTLY APPLIED THE RULE, WITH CERTAIN EXCEPTIONS NOT HERE RELEVANT, THAT A BID GUARANTEE REQUIREMENT IS A MATERIAL PART OF AN INVITATION AND MUST BE ENFORCED AS WRITTEN. THE FACT THAT THE INVITATION USES A TERM WHICH IMPLIES THAT REJECTION WILL NOT OF NECESSITY FOLLOW FAILURE TO COMPLY WITH THE BID BOND REQUIREMENT DOES NOT CHANGE THE RULE. IN THIS INSTANCE THE BID GUARANTEE PROVISION USES THE PHRASE "MAY BE CAUSE OF REJECTION.' SUCH LANGUAGE RENDERS THE REQUIREMENT AS MATERIAL AS IF A MORE POSITIVE EXPRESSION WERE EMPLOYED. 39 COMP. GEN. 827; B-148342, MARCH 29, 1962. TO THIS LIST OF AUTHORITIES WE WOULD NOW ADD THE FOLLOWING CITATIONS FOR EMPHASIS. 42 COMP. GEN. 725, 27; 39 ID. 83, 85; 38 ID. 852; ID. 532. UNITED STATES EX REL., BROOKLYN CONSTRUCTION CO., AND BAYLOR CONSTRUCTION CORP. V. J. GEORGE STEWART, INDIVIDUALLY AND AS ARCHITECT OF THE CAPITOL, ET AL., 234 F.SUPP. 94. THERE CAN BE NO QUESTION OF THE PROPRIETY OF THE REJECTION OF YOUR BIDS ON THE AFOREMENTIONED INVITATION. WE MUST DISAGREE WITH YOUR ASSERTIONS TO THE CONTRARY.

IT IS NOTED THAT YOU MAKE PASSING REFERENCE TO INVITATION FOR BIDS GS-PBS -03-564 ISSUED BY THE PUBLIC BUILDINGS SERVICE ON FEBRUARY 23, 1962, AND COVERING THE LEASE OF ONE MILLION NET USABLE SQUARE FEET OF SPACE. WE ARE UNDER THE IMPRESSION THAT YOUR COMPANY WAS SENT A COPY OF THE INVITATION BUT THAT YOU NEVER SUBMITTED A BID THEREON. WE THEREFORE FAIL TO UNDERSTAND THE BASIS OF YOUR COMPLAINT WITH RESPECT TO THIS INVITATION.

SUBSEQUENT TO THE ISSUANCE OF INVITATION FOR BIDS GS-PBS-03-562 AN URGENT REQUIREMENT FOR APPROXIMATELY 400,000 NET USABLE SQUARE FEET OF SPACE IN THE DOWNTOWN AREA OF WASHINGTON, D.C. DEVELOPED. A PROPER FINDING AND DETERMINATION OF AUTHORITY TO NEGOTIATE A LEASE PURSUANT TO SECTION 302 (C) (2) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 41 U.S.C. 252 (C) (2), WAS EXECUTED, AND A REQUEST FOR PROPOSALS WAS DISPATCHED TO A BROAD GROUP OF PROSPECTIVE LANDLORDS INCLUDING YOUR COMPANY. YOU SUBMITTED AN OFFER OF SPACE LOCATED AT 14TH AND R STREETS, N.W. SINCE THIS SPACE WAS NOT IN CLOSE PROXIMITY TO THE DOWNTOWN AREA OF THE CITY AND WAS OUTSIDE THE AREA OF CONCENTRATION OF FEDERAL EMPLOYMENT, IT WAS NOT DEEMED RESPONSIVE TO THE GOVERNMENT'S REQUIREMENTS.

INVITATION GS-PBS-03-583, DATED FEBRUARY 1, 1963, AND ADDENDUM NO. 1, DATED FEBRUARY 13, 1963, SOLICITED OFFERS TO LEASE 100,000 NET USABLE SQUARE FEET OF FIRST CLASS OFFICE SPACE IN UNITS OF NOT LESS THAN 50,000 NET USABLE SQUARE FEET AT ONE LOCATION. THE SPACE WAS REQUIRED TO BE LOCATED IN THE DISTRICT OF COLUMBIA OR NEARBY VIRGINIA WITHIN A FIVE-MILE RADIUS OF THE ZERO MILESTONE. POSSESSION WAS TO BE TAKEN NOT LATER THAN OCTOBER 1, 1963. THE REPORT OF THE GENERAL SERVICES ADMINISTRATION STATES WITH RESPECT TO THIS ACQUISITION:

"IN RESPONSE TO THIS INVITATION, WE RECEIVED A TOTAL OF SIX BIDS, FROM WHICH IT WAS DETERMINED THAT TWO WERE RESPONSIVE. FROM THESE BIDS, AN AWARD WAS MADE TO THE LOWEST RESPONSIVE BIDDER (CHARLES E. SMITH MANAGEMENT CO.) AT AN ANNUAL RENTAL OF $5.72 PER NET USABLE SQUARE FOOT, INCLUDING ALL SERVICES AND UTILITIES.

"THE PROTESTANT INDICATES THAT ACCEPTANCE OF ITS OFFER WOULD HAVE RESULTED IN A RENTAL RATE AT LEAST $1.00 PER SQUARE FOOT LESS THAN THAT OF THE ACCEPTED BID, HAD HE BEEN ALLOWED TO SUBMIT THE PREMISES 1222-- 22ND STREET, NW., OR THE HECHT COMPANY PROPERTY LOCATED BETWEEN F AND G STREETS AND 6TH AND 7TH STREETS, NW.

"WITH RESPECT TO 1222--- 22ND STREET, NW. (FORMER CAPITAL CADILLAC GARAGE) THIS SPACE WAS FIRST OFFERED TO GSA BY THE PROTESTANT BY LETTER DATED OCTOBER 23, 1962, AT A RENTAL OF $5.00 PER SQUARE FOOT FOR 40,000 SQUARE FEET OF USABLE SPACE. ON NOVEMBER 1, 1962, GSA ADVISED FIRST NATIONAL REALTY CORPORATION THAT SPACE REQUIREMENTS WERE BEING SCREENED TO DETERMINE IF THE 22ND STREET PREMISES OR ANOTHER PREVIOUSLY OFFERED PROPERTY WOULD SATISFY ANY EXISTING NEEDS.

"THEREAFTER WE HAD A REQUIREMENT FOR APPROXIMATELY 50,000 GROSS SQUARE FEET OF GARAGE SPACE WITH SPECIFIED LOCATION REQUIREMENTS. THE PREVIOUSLY OFFERED PREMISES, 1222--- 22ND STREET, MET THE LOCATION CRITERIA AND WAS AN EXISTING GARAGE, THEREFORE, ON JANUARY 10, 1963, THE FIRST NATIONAL REALTY CORPORATION WAS REQUESTED TO SUBMIT AN OFFER FOR THIS SPACE IN ACCORDANCE WITH CERTAIN GARAGE SPECIFICATIONS WHICH WERE ALSO STATED AT THE TIME. AN OFFER ENCOMPASSING THESE SPECIFICATIONS WAS RECEIVED ON JANUARY 25, 1963, AND SUBSEQUENT ACTIVE NEGOTIATIONS WERE CONDUCTED FOR THE LEASING OF THE SPACE.

"THE NEGOTIATIONS WITH FIRST NATIONAL REALTY CORPORATION FAILED TO PRODUCE AN ACCEPTABLE OFFER AND SINCE NO OTHER SPACE WAS AVAILABLE TO FULFILL THIS REQUIREMENT, THE FIRST NATIONAL REALTY CORPORATION WAS ADVISED BY GSA, BY LETTER DATED FEBRUARY 28, 1963, THAT WE WERE PROCEEDING WITH THE NECESSARY ACTION TO CONDEMN THE USE AND OCCUPANCY OF THE PROPERTY. ON MARCH 18, 1963, THE DEPARTMENT OF JUSTICE FILED THE CONDEMNATION PROCEEDINGS AND AN ORDER FOR IMMEDIATE POSSESSION WAS ENTERED.

"IT WAS AFTER NEGOTIATIONS FOR THE LEASING OF THE GARAGE SPACE HAD COMMENCED THAT INVITATION GS-PBS-03-583 WAS ISSUED. IN THE MEANTIME, BY LETTER DATED MARCH 14, 1963, THE PROTESTANT AGAIN OFFERED THE PREMISES 1222--- 22ND STREET TOGETHER WITH AN UNDESIGNATED ADJOINING BUILDING FOR USE AS OFFICE SPACE IN RESPONSE TO THE ABOVE-MENTIONED INVITATION WHICH HAD BY THIS TIME BEEN PUBLICLY OPENED AND THE BID PRICES POSTED. SINCE, AS ABOVE STATED, THE DEPARTMENT OF JUSTICE HAD BEEN REQUESTED TO INSTITUTE PROCEEDINGS TO CONDEMN THIS PROPERTY FOR USE AS GARAGE SPACE, IT WOULD HAVE BEEN INAPPROPRIATE TO CONSIDER THE PROPOSAL FOR OFFICE SPACE.

"AFTER CONDEMNATION FOR USE AND OCCUPANCY OF 1222--- 22ND STREET, THE FIRST NATIONAL REALTY CORPORATION THEN OFFERED THE HECHT COMPANY WAREHOUSE PROPERTY LOCATED AT 613 G STREET AND 614 H STREET, NW., ON MARCH 29, 1963. THE MAY DEPARTMENT STORES COMPANY, OWNER OF THE PROPERTY HAD ALREADY SUBMITTED AN OFFER TO GSA WHICH WAS OPEN UNTIL JULY 1, 1963. THUS, THE RECEIPT OF TWO LISTINGS FOR THE SAME PROPERTY RAISED THE QUESTION AS TO WHETHER FIRST NATIONAL REALTY CORPORATION HAD AUTHORITY TO SUBMIT THE PROPERTY. SINCE THE FIRST NATIONAL REALTY CORPORATION WAS NOT THE OWNER, PROOF WAS REQUESTED OF ITS AUTHORITY TO OFFER THE PROPERTY FOR LEASE.

"EVIDENCE OF THIS AUTHORITY WAS SUBMITTED BY THE FIRST NATIONAL REALTY CORPORATION ON APRIL 23, 1963.

"THE OFFER FOR THE HECHT COMPANY WAREHOUSE PROPERTY WAS SUBMITTED IN RESPONSE TO INVITATION TO BID GS-PBS-03-583 WHICH REQUIRED DELIVERY OF SPACE NOT LATER THAN OCTOBER 1, 1963; HOWEVER, AS STATED ABOVE, THE OFFER WAS SUBMITTED AFTER THE BIDS WERE OPENED AND COULD NOT BE CONSIDERED. REGARDLESS OF THE QUESTION OF AUTHORITY TO SUBMIT SUCH AN OFFER, ITS SUBMISSION AFTER BID OPENING WOULD NOT HAVE ALLOWED GSA TO HAVE CONSIDERED THE BID. IN THIS RESPECT, THE OFFERS SUBMITTED UNDER INVITATION NO. 583 VESTED IN THE GOVERNMENT A BID ACCEPTANCE PERIOD OF 60 DAYS FROM THE DATE SET FOR THE OPENING WHICH WAS FEBRUARY 20, 1963. AN APPRAISAL WAS MADE OF THE PROPERTY OFFERED BY THE LOW RESPONSIVE BIDDER AND OUR APPRAISAL INDICATED THAT THE OFFERED RENTAL RATE WAS BELOW THE RENTAL VALUE AS ESTABLISHED BY THE APPRAISAL AND WAS WITHIN THE 15 PERCENT ECONOMY ACT LIMITATION. COMPARABLE RENTALS FOR NEW BUILDINGS ALSO INDICATED THAT THE BID RENTAL WAS IN ACCORDANCE WITH THE MARKET. IN VIEW OF THE APPRAISAL DATA AND COMPARABLE RENTALS, AN AWARD WAS MADE TO THE LOWEST RESPONSIVE BIDDER UNDER THE INVITATION ON APRIL 17, 1963.'

THE ABOVE-QUOTED DISCUSSION OUTLINES THE BASIS FOR THE CONTENTION OF THE PUBLIC BUILDINGS SERVICE THAT THE AWARD TO CHARLES E. SMITH MANAGEMENT COMPANY WAS DICTATED BY STATUTE AND REGULATION AS BEING THE CONSUMMATION OF A LEASE WITH THE LOWEST RESPONSIBLE AND RESPONSIVE BIDDER. SEE SECTION 303 (B) OF THE ACT OF JUNE 30, 1949, CH. 288, 63 STAT. 395, 41 U.S.C. 253 (B).

INVITATION GS-PBS-03-586, DATED JUNE 3, 1963, SOLICITED BIDS ON 100,000 SQUARE FEET OF NET USABLE SPACE FOR DELIVERY NOT LATER THAN 120 DAYS AFTER THE DATE OF AWARD. YOUR COMPANY TENDERED SPACE IN BOTH 614 H STREET AND 613 G STREET, N.W. OF THIS INVITATION THE REPORT STATES:

"AFTER ISSUANCE OF THE INVITATION AND PRIOR TO ANY AWARD THE TOTAL AMOUNT OF LEASED SPACE NEEDED BY THE GOVERNMENT CHANGED AND THE REQUIREMENTS DESCRIBED IN THE INVITATION WERE NO LONGER CONSISTENT WITH THE NEEDS. THIS INVITATION PROVIDED A 90-DAY ACCEPTANCE PERIOD FOR THE GOVERNMENT. DURING THE PERIOD BETWEEN THE ISSUANCE OF THE INVITATION AND THE EXPIRATION OF THE BID ACCEPTANCE PERIOD, SUBSTANTIAL CHANGES OCCURRED IN THE REAL ESTATE MARKET AND A REDUCTION IN RENTAL RATES COULD BE FORESEEN. IN THE LIGHT OF THIS DEVELOPMENT, PRUDENT MANAGEMENT PRACTICES DICTATED THE NEED OF AN ANALYSIS OF THESE CONDITIONS IN ORDER TO DETERMINE THE MOST ECONOMIC ACTION TO BE TAKEN. AS A RESULT OF THIS ANALYSIS AND OF OUR CHANGED SPACE NEEDS, NO AWARD WAS MADE UNDER THIS INVITATION. BY LETTER DATED OCTOBER 1, 1963, THE FIRST NATIONAL REALTY CORPORATION, AS WELL AS ALL OTHERS WHO HAD SUBMITTED BIDS IN RESPONSE TO THE AFOREMENTIONED INVITATION, WERE INFORMED THAT NO AWARD WOULD BE MADE.'

AGAIN WE DIRECT YOUR ATTENTION TO 41 U.S.C. 253 (B) WHICH, AMONG OTHER THINGS, EXPRESSLY PERMITS THE HEAD OF THE PROCURING AGENCY TO REJECT ALL BIDS UPON A DETERMINATION THAT SUCH ACTION IS IN THE PUBLIC INTEREST. AUTHORITY TO MAKE THIS DETERMINATION IS DELEGATED TO ALL CONTRACTING OFFICERS BY SECTION 1-2.404-1 (B) OF THE FEDERAL PROCUREMENT REGULATIONS. SINCE THE DECISION WHETHER TO REJECT ALL BIDS AFTER OPENING INVOLVES THE EXERCISE OF PROCUREMENT RESPONSIBILITY, WE WILL NOT ORDINARILY QUESTION UTILIZATION OF THE PROCEDURE ABSENT EVIDENCE THAT ITS EMPLOYMENT WAS ARBITRARY AND CAPRICIOUS UNDER THE CIRCUMSTANCES. OUR OFFICE HAS REFUSED TO SUBSTITUTE ITS JUDGMENT FOR THAT OF THE GSA, THE AGENCY RESPONSIBLE FOR THE HOUSING OF GOVERNMENT AGENCIES GENERALLY, IN CASES SIMILAR TO THIS. -149590, DATED SEPTEMBER 12, 1962.

YOU REFER ALSO TO INVITATION FOR BIDS GS-PBS-03-590 DATED AUGUST 19, 1963, WHICH COVERED THE ACQUISITION OF APPROXIMATELY 102,000 SQUARE FEET OF NET USABLE SPACE REQUIRED TO BE LOCATED WITHIN A FOUR-MILE PERIMETER OF THE NATIONAL INSTITUTES OF HEALTH, BETHESDA, MARYLAND. THE SPACE WAS TO BE OCCUPIED BY NIH MENTAL HEALTH INSTITUTE. THE FIRST NATIONAL REALTY CORPORATION OFFERED SPACE AT TWO LOCATIONS, ONE THE INTERSECTION OF FENTON STREET AND BONIFANT STREET, BETHESDA, MARYLAND, AND THE OTHER AT THE WAVERLY BUILDING, BETHESDA, MARYLAND.

A QUESTION AROSE AS TO THE VALIDITY OF ANY PROPOSED AWARD TO THE APPARENT LOW BIDDER, INTERCONTINENTAL INNS, INC., BECAUSE THE EVALUATION CRITERIA SCHEDULED IN THE INVITATION HAD FAILED TO TAKE INTO CONSIDERATION CERTAIN COSTS TO THE GOVERNMENT ANCILLARY TO THE LEASE AND FOR OTHER REASONS. THE DETERMINATION WAS MADE TO REJECT ALL BIDS AND TO READVERTISE ON A MORE REALISTIC BASIS, WITH WHICH DETERMINATION WE CONCURRED BY DECISION B- 152927, DATED MAY 21, 1964. INVITATION FOR BIDS GS-PBS-03-595, DATED NOVEMBER 27, 1963, WAS ISSUED TO FULFILL THE SAME REQUIREMENT AND, BY ITS WORDING, SOLICITED BIDS FOR NOT LESS THAN 95,000 NOR MORE THAN 102,000 NET USABLE SQUARE FEET OF FIRST-CLASS OFFICE SPACE. LOCATION WAS REQUIRED TO BE WITHIN A FOUR AIR-MILE RADIUS OF THE PERIMETER OF THE NATIONAL INSTITUTES OF HEALTH, BETHESDA, MARYLAND, EXCLUDING THE DISTRICT OF COLUMBIA. CONCERNING THE HISTORY OF THIS ACQUISITION AND YOUR ALLEGATIONS OF IRREGULARITY THE GSA REPORT ADVISES US AS FOLLOWS: "IN RESPONSE TO THIS INVITATION WE RECEIVED A TOTAL OF THIRTEEN BIDS. THE FACT THAT CERTAIN PROTESTS WERE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE PRECLUDED AN AWARD WITHIN THE 45-DAY ACCEPTANCE PERIOD STATED IN THE INVITATION, AND AN EXTENSION OF TIME WAS REQUESTED FROM THE BIDDERS ON JANUARY 27, 1964. THIS EXTENSION OF TIME DELAYED THE REQUIRED DELIVERY DATE OF THE SPACE TO JULY 1, 1964. SUBSEQUENT GOVERNMENT REQUESTS FOR ADDITIONAL TIME EXTENSIONS FOR ACCEPTANCE OF BIDS RESULTED IN FURTHER DELAYS AND EXTENDED THE DELIVERY DATE TO AS LATE AS SEPTEMBER 1, 1964.

"THE BIDS WERE ALLOWED TO EXPIRE AND IN VIEW OF THE VERY URGENT NEED FOR THIS SPACE, IT WAS DETERMINED ON JULY 2, 1964, IN ACCORDANCE WITH SECTION 302 (C) (2) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, THAT THE PUBLIC EXIGENCY WOULD NOT ADMIT OF THE DELAY INCIDENT TO ADVERTISING, TO NEGOTIATE A LEASE FOR THE SPACE.

"ACCORDINGLY, ON JULY 6, 1964, A SOLICITATION FOR NEGOTIATED OFFERS WAS ISSUED. THE SOLICITATION WAS MAILED TO ALL THOSE PROSPECTIVE OFFERORS WHO HAD BEEN FOUND CAPABLE OF DELIVERING THE REQUIRED AMOUNT OF SPACE BY SEPTEMBER 1, 1964.

"THE WAVERLY BUILDING, BETHESDA, MARYLAND, PREVIOUSLY SUBMITTED BY THE FIRST NATIONAL REALTY CORPORATION IN RESPONSE TO INVITATION GS-PBS 03-595, AS WELL AS OTHER PROPERTIES KNOWN TO BE AVAILABLE IN THE NEAR FUTURE, WERE INSPECTED BY GSA ENGINEERING PERSONNEL IN ORDER TO DETERMINE WHICH PROPERTIES, IN THEIR PROFESSIONAL JUDGMENT, COULD BE COMPLETED AND MADE AVAILABLE BY THE SEPTEMBER 1, 1964, DEADLINE.

"THE PROTESTANT'S PROPOSAL CONTEMPLATED CONSTRUCTION OF AN ADDITION TO THE WAVERLY BUILDING TOTALING APPROXIMATELY 69,120 NET USABLE SQUARE FEET OF SPACE AND SINCE NO ACTUAL CONSTRUCTION HAD TAKEN PLACE, OTHER THAN SOME EXCAVATION, THE ADDITION COULD NOT POSSIBLY HAVE BEEN COMPLETED BY SEPTEMBER 1, 1964. ACCORDINGLY, FIRST NATIONAL REALTY CORPORATION WAS NOT REQUESTED TO SUBMIT AN OFFER.

"REGARDLESS OF THE INABILITY OF THE PROTESTANT TO MAKE TIMELY DELIVERY, THE RESTRICTION CONTAINED IN THE INDEPENDENT OFFICES APPROPRIATION ACT OF 1965 WOULD HAVE PRECLUDED CONSIDERATION OF ANY OFFER INVOLVING THE CONSTRUCTION OF BUILDINGS AND IMPROVEMENTS AT AN ESTIMATED COST IN EXCESS OF $200,000, IN VIEW OF THE COMPTROLLER GENERAL'S DECISION DATED APRIL 21, 1964, NO. B-153036.

"THE SOLICITATION WAS MAILED TO FOUR (4) PROSPECTIVE OFFERORS WHOSE PROPERTIES WERE CONSIDERED TO BE CAPABLE OF BEING DELIVERED ON THE REQUIRED DATE, NAMELY, WASHINGTON SCIENCE CENTER CONDUIT, INC., JERRY WOLMAN, FAIRMONT ASSOCIATES AND BETHESDA AVENUE ASSOCIATES (L. S. TURNOVER).

"OFFERS WERE RECEIVED FROM ALL OF THE ABOVE-NAMED PROSPECTIVE OFFERORS ON JULY 13, 1964, AND IT IS CATEGORICALLY DENIED THAT, PRIOR TO THE ISSUANCE OF THE SOLICITATION, ANY NEGOTIATIONS TOOK PLACE WITH ANYONE. NEGOTIATIONS WERE CONDUCTED UPON RECEIPT OF THE ABOVE OFFERS AND EACH OF THE OFFERORS RECEIVED EQUAL CONSIDERATION. THE LOWEST NEGOTIATED PROPOSAL WAS THAT OF JERRY WOLMAN WHO SUBMITTED A PRICE OF $3.69 PER SQUARE FOOT, FULLY SERVICED, AND AN AWARD WAS MADE TO HIM ON JULY 22, 1964.

"REGARDING THE PROTESTANT'S ALLEGATION THAT NIH DID NOT BEGIN TO TAKE POSSESSION OF THE SPACE UNTIL OCTOBER 1964, THE FOLLOWING FACTS ARE PRESENTED:

"THE SOLICITATION REQUIRED DELIVERY BY SEPTEMBER 1, 1964; HOWEVER, THE CONTRACT DELIVERY DATE WAS EXTENDED TO SEPTEMBER 5, 1964, BECAUSE OF A DELAY BY THE GOVERNMENT IN DELIVERING APPROVED LAYOUT PLANS TO THE CONTRACTOR. ACTUAL DELIVERY OF THE SPACE BEGAN SEPTEMBER 17, 1964, WITH THE ACCEPTANCE OF TWO FLOORS (SECOND AND THIRD) FOLLOWED BY DELIVERY OF THE FOURTH THROUGH TENTH FLOORS ON SEPTEMBER 29, 1964. THE DELIVERY OF THE FIRST FLOOR AND BASEMENT ON OCTOBER 14, 1964, COMPLETED OCCUPANCY OF THE BUILDING.

"AT THE TIME OF THE AWARD THERE WAS A REASONABLE EXPECTANCY THAT THE BUILDING WOULD BE COMPLETED AND READY FOR OCCUPANCY ON THE REQUIRED DATE. IN ANY EVENT, IT WAS KNOWN THAT OCCUPANCY OF THE MAJOR PORTION OF THE PREMISES COULD BE OBTAINED WITHIN A SHORT TIME--- APPROXIMATELY TWO TO THREE WEEKS AFTER THE REQUIRED DELIVERY DATE. SINCE THE LOW OFFER MADE BY JERRY WOLMAN WAS SO ADVANTAGEOUS TO THE GOVERNMENT FROM THE STANDPOINT OF PRICE OVER A TEN-YEAR PERIOD, IT WAS DETERMINED TO MAKE THE AWARD TO HIM EVEN THOUGH THERE WAS SOME SLIGHT RISK THAT OCCUPANCY OF A PORTION OF THE SPACE MIGHT BE DELAYED FOR THE PERIOD OF TWO OR THREE WEEKS, ESPECIALLY IN VIEW OF THE PROVISIONS OF THE SOLICITATION WITH REGARD TO LIQUIDATED DAMAGES FOR LATE DELIVERY. WHETHER TO IMPOSE LIQUIDATED DAMAGES IS NOW UNDER ACTIVE CONSIDERATION.'

CLEARLY THERE IS NO LEGAL REQUIREMENT THAT A CONTRACT MUST BE AWARDED AFTER FORMAL SOLICITATION OF BIDS WHEN THE RIGHT TO REJECT ANY AND ALL BIDS IS RESERVED TO THE GOVERNMENT BY LAW AND IN THE INVITATION FOR BIDS. 10 MCQUILLIN, MUNICIPAL CORPORATIONS, 3RD EDITION, SECTION 29.77; MALAN CONSTRUCTION CORPORATION V. BOARD OF COUNTY ROAD COMMISSIONERS OF THE COUNTY OF WAYNE, 187 F.SUPP. 937 (1960); JOSEPH RUGO, INCORPORATED V. HENSON, 190 F.SUPP. 281 (1960). A CONTRARY RULE WOULD OBLIGE THE GOVERNMENT TO ACCEPT THE LOWEST BID TENDERED IRRESPECTIVE OF THE REASONABLENESS OF ITS TERMS AND WITHOUT REGARD TO THE POSSIBILITY OF COLLUSIVE BIDDING. SO INFLEXIBLE A PROCEDURE WOULD RENDER LOGICAL OR FACTUAL FLAWS IN, OR OMISSIONS FROM, THE INVITATION IRREMEDIABLE AND, PERHAPS, NECESSITATE THE GOVERNMENT TO BIND ITSELF TO AN UNFAVORABLE CONTRACT. THUS OUR OFFICE HAS HELD THAT A PUBLIC OFFICER ACTING FOR THE PUBLIC WELFARE IS NOT BOUND TO ACCEPT A BID WHERE IT IS DETERMINED THAT A MORE ADVANTAGEOUS CONTRACT FOR THE GOVERNMENT MIGHT RESULT AND THE PUBLIC INTEREST MIGHT BE BETTER SERVED BY A REJECTION OF ALL BIDS AND READVERTISEMENT. 17 COMP. GEN. 554, 559; 36 ID. 364, 365.

SIMILARLY A VALID AND PROPER ADMINISTRATIVE DETERMINATION TO NEGOTIATE AFTER TWO SUCCESSIVE ADVERTISED SOLICITATIONS HAVE SHOWN THE GOVERNMENT'S NEEDS TO BE INCAPABLE OF ADEQUATE FULFILLMENT BY ACCEPTANCE OF THE LOWEST RESPONSIVE BID, WILL NOT BE NULLIFIED BY OUR OFFICE. THE DISCRETION TO NEGOTIATE VESTED IN THE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION BY STATUTE MAY NOT BE QUESTIONED IN THE ABSENCE OF EVIDENCE TO SHOW IT WAS EXERCISED IN BAD FAITH. 38 COMP. GEN. 703.

YOU QUESTION THE AUTHORITY OF THE PUBLIC BUILDINGS SERVICE TO DISREGARD YOUR COMPANY IN THE SOLICITATION OF OFFERS ON THE NEGOTIATED ACQUISITION OF SPACE. THE NEGOTIATION WAS BASED IN THIS INSTANCE UPON THE PUBLIC EXIGENCY EXCEPTION SET FORTH IN SECTION 302 (C) (2) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, CH. 288, 63 STAT. 393, 41 U.S.C. 252 (C) (2). HAD PROCUREMENT OFFICIALS SOUGHT TO JUSTIFY THE DETERMINATION TO NEGOTIATE UPON THE AUTHORITY SET FORTH AT 41 U.S.C. 252 (C) (14) WE WOULD AGREE WITH YOUR CONTENTION THAT PROPOSALS SHOULD HAVE BEEN REQUESTED FROM EVERY BIDDER ON THE TWO PREVIOUS INVITATIONS. BUT WE THINK THE CONTRACTING OFFICER ACTED IN THE PROPER EXERCISE OF HIS DISCRETION IN OMITTING YOU FROM THE LIST OF PROSPECTIVE OFFERORS BASED ON HIS KNOWLEDGE AS GAINED FROM VISUAL INSPECTIONS OF THE SITE THAT YOU HAD IMMEDIATELY AVAILABLE FOR OCCUPANCY ONLY 35,000 SQUARE FEET OF SPACE AND THAT AS OF THE TIME NO SUBSTANTIAL CONSTRUCTION PROGRESS HAD BEEN MADE ON THE ADDITIONAL 69,120 SQUARE FEET OF SPACE NECESSARY TO SATISFY THE GOVERNMENT'S URGENT REQUIREMENTS. TO HAVE AWARDED YOU A LEASE BY NEGOTIATION OR OTHERWISE AT THAT TIME WOULD HAVE BEEN AN ACT IN VIOLATION OF THE RESTRICTIVE PROVISION CONTAINED IN THE INDEPENDENT OFFICES APPROPRIATION ACT OF 1964 (PUBLIC LAW 88-215), 77 STAT. 436-437, SINCE THE THEN STAGE OF YOUR CONSTRUCTION PROGRESS WAS SUCH AS TO WARRANT THE INFERENCE THAT THE ADDITIONAL SPACE WAS MOTIVATED BY AND WAS BEING CONSTRUCTED SOLELY TO MEET THE PROVISIONS OF ANY SUCH LEASE. IN CONTRAST, AS OF THE INITIATION OF NEGOTIATIONS, SUBSTANTIAL CONSTRUCTION PROGRESS HAD BEEN MADE UPON THE WISCON BUILDING.

BY INVITATION FOR BIDS GS-PBS-03-593 DATED OCTOBER 23, 1963, AS LATER AMENDED, THE GENERAL SERVICES ADMINISTRATION REQUESTED OFFERS FOR THE LEASE OF NOT LESS THAN 132,000 NOR MORE THAN 140,000 NET USABLE SQUARE FEET OF OFFICE, STORAGE AND SPECIAL-PURPOSE SPACE. THE LOCATION OF THIS SPACE, INTENDED FOR USE BY THE DEPARTMENT OF COMMERCE, WAS DELIMITED TO BE ANYWHERE IN THE DISTRICT OF COLUMBIA, NEARBY MARYLAND OR VIRGINIA, WITHIN A TEN AIR-MILE RADIUS OF THE ZERO MILESTONE. THE INVITATION CALLED FOR SPACE IN A SINGLE BUILDING OR NOT MORE THAN THREE SEPARATE CONTIGUOUS BUILDINGS AND SPECIFIED THE PREFERRED OCCUPANCY DATE AS FEBRUARY 1, 1964, BUT NOT LATER THAN JUNE 1, 1964.

THE SECTION OF THE GSA REPORT DEALING WITH THIS ACQUISITION READS AS FOLLOWS:

"IN RESPONSE TO THIS INVITATION WE RECEIVED A TOTAL OF TEN BIDS. THE FIRST TWO LOWEST OFFERS WERE DETERMINED TO BE NONRESPONSIVE AND AN AWARD WAS MADE TO THE THIRD LOWEST BIDDER WHO WAS CONSIDERED TO BE RESPONSIVE. IN RESPONSE TO THIS INVITATION THE FIRST NATIONAL REALTY CORPORATION SUBMITTED A BID FOR SPACE LOCATED AT 613 G STREET AND 614 H STREET, NW. THIS SPACE WAS OFFERED AT A RENTAL RATE OF $4.19 PER SQUARE FOOT, FULLY SERVICED, AND $3.94 PER SQUARE FOOT, EXCLUDING UTILITIES, AND WAS THE FOURTH LOWEST BID RECEIVED. THE WASHINGTON SCIENCE CENTER CONDUIT, INC., OFFERED THE REQUIRED SPACE AT A RATE OF $4.04 PER SQUARE FOOT, FULLY SERVICED, AND $3.70 PER SQUARE FOOT, EXCLUDING UTILITIES, AND WAS THE LOWEST RESPONSIVE BIDDER. THE AWARD WAS MADE TO THE WASHINGTON SCIENCE CENTER CONDUIT, INC., ON JANUARY 15, 1964, FOR SPACE IN THE WASHINGTON SCIENCE CENTER BUILDINGS 1 AND 2, ROCKVILLE, MARYLAND.

"SUBSEQUENTLY, AS A RESULT OF A PROTEST, THE DECISION OF THE COMPTROLLER GENERAL NO. B-153036 MENTIONED ABOVE, RULED THAT THE ABOVE AWARD WAS IN CONTRAVENTION OF THE RESTRICTION OF THE INDEPENDENT OFFICES APPROPRIATION ACT OF 1964 (PUBLIC LAW 88-215), 77 STAT. 436 437, BECAUSE THE SUCCESSFUL BIDDER PROPOSED TO CONSTRUCT AN ADDITIONAL 40,000 NET SQUARE FOOT BUILDING. ACCORDINGLY, THE GOVERNMENT'S LETTER OF ACCEPTANCE DATED JANUARY 15, 1964, TO THE WASHINGTON SCIENCE CENTER CONDUIT, INC., WAS CANCELLED BY LETTER DATED APRIL 22, 1964.

"AS A RESULT OF THE FOREGOING, THE DEPARTMENT OF COMMERCE THEN HAD AN OUTSTANDING URGENT NEED FOR THE AFOREMENTIONED OFFICE, A SPECIAL PURPOSE AND STORAGE SPACE. UNDER THESE CIRCUMSTANCES IT WAS IMPERATIVE THAT THIS SPACE BE LEASED AS SOON AS POSSIBLE BECAUSE THE PROPOSED MOVE TO THE SPACE THAT WOULD BE ACQUIRED HAD TO BE ACCOMPLISHED IN ORDER TO BEGIN IMPLEMENTATION OF A MASTER PLAN OF SPACE UTILIZATION BY THE DEPARTMENT OF COMMERCE. THIS MASTER PLAN CONTEMPLATED THE ACCOMPLISHMENT OF THE FOLLOWING:

"1. THE VACATION OF APPROXIMATELY 104,025 SQUARE FEET OF SUB STANDARD LEASED AND GOVERNMENT-OWNED SPACE IN THE WASHINGTON METROPOLITAN AREA.

"2. PROVISION FOR APPROXIMATELY 87,600 SQUARE FEET OF EXPANSION SPACE, MAKING A TOTAL REQUIREMENT OF 191,625 SQUARE FEET OF WHICH APPROXIMATELY 132,000 TO 142,000 SQUARE FEET WAS TO BE ACQUIRED BY LEASE. THE REMAINING APPROXIMATELY 60,000 SQUARE FEET WAS TO BE SATISFIED BY REMODELING OF SPACE IN THE COMMERCE BUILDING.

"3. POSITIVE ACTION HAD ALREADY BEEN TAKEN TO ACCOMPLISH THE PHYSICAL MOVE OF THE COAST AND GEODETIC SURVEY, AS WELL AS THE REALIGNMENT OF A SUBSTANTIAL AMOUNT OF THE DEPARTMENT OF COMMERCE SPACE WHICH WAS ALSO A PART OF THE MASTER PLAN. THIS ACTION HAD ADVANCED TO THE STAGE WHERE THE GOVERNMENT WOULD HAVE BEEN SERIOUSLY INJURED FINANCIALLY AND OTHERWISE IF ADEQUATE LEASED SPACE WAS NOT OBTAINED BY JUNE 1, 1964.

"BASED ON OUR FINDINGS AS A RESULT OF RECENT CONTINUOUS EFFORTS TO ACQUIRE OTHER LARGE BLOCKS OF SPACE IN THE METROPOLITAN AREA, EXTENSIVE PERSONAL CANVASSES AND SOLICITATIONS FOR LISTINGS FOR SUCH SPACE, IT WAS FOUND THAT THE ONLY SPACE AVAILABLE MEETING THE REQUIREMENT OF THE DEPARTMENT OF COMMERCE WHICH COULD BE DELIVERED BY JUNE 1, 1964, WAS THE WASHINGTON SCIENCE CENTER BUILDINGS 1 AND 2. THE FIRST NATIONAL REALTY CORPORATION'S OFFER OF THE HECHT COMPANY PROPERTIES WERE AMONG THE PROPERTIES INSPECTED AND CONSIDERED, AND CONSISTENT WITH THE CONCLUSIONS OF OUR ENGINEERING STAFF, IT WAS DETERMINED THAT THE HECHT COMPANY PROPERTIES WERE UNABLE TO BE DELIVERED WITHIN THE SPECIFIED TIME.

"ACCORDINGLY, IT WAS DETERMINED IN ACCORDANCE WITH SECTION 302 (C) (2) AND SECTION 302 (C) (10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, TO SOLICIT A NEGOTIATED OFFER FROM THE WASHINGTON SCIENCE CENTER CONDUIT, INC.

"AN OFFER WAS RECEIVED FROM THE WASHINGTON SCIENCE CENTER CONDUIT, INC., AND ACCEPTED ON APRIL 23, 1964, FOR THE LEASING OF THE REQUIRED AMOUNT OF SPACE. THIS SPACE MET THE GOVERNMENT'S REQUIREMENTS AND THE NEGOTIATED RENTAL RATE OF $3.66 PER SQUARE FOOT, EXCLUDING UTILITIES, WAS LESS THAN THE ORIGINALLY ACCEPTED OFFER OF $3.70 PER SQUARE FOOT, EXCLUDING UTILITIES. IN CONNECTION WITH THIS AWARD AN ADDITIONAL PROTEST WAS RECEIVED CONCERNING THE LEGALITY OF GSA'S ACTION FROM SOL C. BENNETT AND ASSOCIATES ON JUNE 22, 1964, AND IN RESPONSE THERETO GSA ADVISED THE COMPTROLLER GENERAL BY LETTER DATED JULY 27, 1964, OF THE COMPLETE DETAILS INVOLVED IN THIS AWARD. SUBSEQUENTLY, THE COMPTROLLER GENERAL BY LETTER TO THE PROTESTANT (SOL BENNETT) B-153036 DATED SEPTEMBER 2, 1964, AFFIRMED THE ACTION OF GSA IN THIS AWARD.' AS THE REPORT STATES, YOUR BID ON THE HECHT COMPANY WAREHOUSE WAS REJECTED UPON THE BASIS OF A FINDING BY ENGINEERING PERSONNEL THAT THE WORK NECESSARY TO BRING THE BUILDING INTO FIT CONDITION FOR GOVERNMENT OCCUPANCY WAS SO EXTENSIVE AS TO WARRANT THE CONCLUSION THAT IT COULD NOT BE READIED BY THE SCHEDULED DATE OF POSSESSION. IMPLICIT IN THIS FINDING IS THE DETERMINATION THAT YOUR BID ON THE INVITATION WAS NONRESPONSIVE AND THAT THEREFORE NO PURPOSE WOULD HAVE BEEN SERVED BY SOLICITING YOUR COMPANY FOR A PROPOSAL ON THE SUBSEQUENT NEGOTIATED ACQUISITION.

BIDS FOR THE ACQUISITION OF LEASEHOLDS BY THE GOVERNMENT ARE NOT SUBJECT TO EVALUATION ON THE BASIS OF PRICE ALONE. THE OVER-ALL WELFARE OF GOVERNMENT EMPLOYEES AND THE EFFICIENT FULFILLMENT OF AGENCY FUNCTION ARE BOTH MATTERS TO BE CONSIDERED IN THE TAKING OF SPACE. OUT OF REGARD FOR THE REQUIREMENTS OF EXECUTIVE ORDER NO. 11035 DATED JULY 9, 1962, ISSUED IN IMPLEMENTATION OF THE ACT OF SEPTEMBER 5, 1950, CHAPTER 849, 64 STAT. 578, 582, 40 U.S.C. 490 (E), OUR OFFICE HAS RECENTLY HELD THE FACTOR OF ENVIRONMENT, IN TERMS OF BOTH THE AREA SURROUNDING THE BUILDING AND ITS PHYSICAL CHARACTERISTICS, TO BE FOR CONSIDERATION IN THE EVALUATION OF ANY PROPOSED GOVERNMENT TENANCY. B-152768, DATED APRIL 6, 1964, PUBLISHED AT 43 COMP. GEN. 663. IT HAS ALSO BEEN SAID THAT THERE IS NO REQUIREMENT THAT THE GOVERNMENT LEASE SPACE MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED. B-147512 DATED DECEMBER 18, 1961.

IN THE LIGHT OF THE ABOVE DISCUSSION WE PERCEIVE NOTHING IRREGULAR ABOUT THE PROCEDURES EMPLOYED BY THE PUBLIC BUILDINGS SERVICE IN THIS INSTANCE.

THE REPORT OF THE GENERAL SERVICES ADMINISTRATION CONTAINS THE FOLLOWING COMMENTARY WITH RESPECT TO THE REQUEST FOR PROPOSALS DATED DECEMBER 6, 1963, SOLICITING OFFERS FOR THE LEASE OF APPROXIMATELY 135,000 NET USABLE SQUARE FEET OF FIRST-CLASS OFFICE SPACE AT ONE LOCATION REQUIRED TO BE WITHIN ONE AIR-MILE RADIUS OF THE ZERO MILESTONE, WASHINGTON, D.C.:

"IN VIEW OF THE CRITICAL DELIVERY DATE REQUIRED, A COMPREHENSIVE PERSONAL CANVASS OF THE DELINEATED AREA WAS MADE BY GSA PERSONNEL IN ORDER TO DETERMINE BUILDINGS CAPABLE OF BEING DELIVERED BY FEBRUARY 15, 1964. BASED UPON OUR FINDINGS, AND PARTICULARLY THE REQUIRED DELIVERY DATE, THE REGIONAL OFFICE DETERMINED ON DECEMBER 6, 1963, IN ACCORDANCE WITH THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED (SECTION 302 (C) (2) ( TO NEGOTIATE WITH ALL PROSPECTIVE OFFERORS AND THE SOLICITATION WAS ISSUED.

"EIGHT OFFERS WERE RECEIVED IN RESPONSE TO THIS SOLICITATION AND ANALYZED ON DECEMBER 31, 1963. AN OPPORTUNITY WAS GIVEN TO EACH OF THE OFFERORS TO REVISE THEIR OFFERS. THE FIRST NATIONAL REALTY CORPORATION OFFERED 32,324 SQUARE FEET OF SPACE LOCATED AT 613 G STREET AND 614 H STREET NW., AT AN ANNUAL RENTAL RATE OF $4.74 PER SQUARE FOOT FULLY SERVICED FOR A FIVE-YEAR FIRM TERM AND $4.49 PER SQUARE FOOT FULLY SERVICED FOR A TEN-YEAR TERM. THIS OFFER WAS THE LOWEST RECEIVED.

"AFTER RECEIPT OF THIS OFFER, AN INSPECTION OF THE OFFERED PREMISES BY OUR ENGINEERS REVEALED THE DELIVERY DATE WAS NOT FEASIBLE AND THAT A REALISTIC DATE WOULD BE SIX (6) MONTHS FROM THE START OF WORK. ADDITIONALLY, AN APPRAISAL OF THE PROPERTY ALSO REVEALED THAT THE RENTAL RATE OFFERED EXCEEDED THE 15 PERCENT LEGAL LIMITATION OF THE ECONOMY ACT BY A SUBSTANTIAL SUM. THE SOLICITATION ALSO STATED "SINCE DELIVERY OF THE SPACE IS OF THE ESSENCE, THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OFFER, WHEN, IN THE SOLE DETERMINATION OF THE CONTRACTING OFFICER, THE OFFEROR'S SPECIFIED DELIVERY DATE CANNOT BE MET.' IN VIEW OF THIS INABILITY OF DELIVERY AND THE ABOVE-MENTIONED ECONOMY ACT LIMITATION, ACCEPTANCE OF THE PROTESTANT'S OFFER WAS NOT POSSIBLE AND THE OFFER WAS ELIMINATED FROM CONSIDERATION. (AS TO THE ECONOMY ACT LIMITATION, SEE 40 U.S.C. 2782, 12 COMP. GEN. 440.)

"THE NEXT LOWEST OFFER WAS THAT OF JERRY WOLMAN FOR SPACE LOCATED AT 1325 K STREET, NW., AND AN AWARD WAS MADE TO HIM FOR APPROXIMATELY 111,828 NET USABLE SQUARE FEET OF SPACE AT AN ANNUAL RENTAL OF $5.00 PER SQUARE FOOT FULLY SERVICED FOR A FIRM TEN-YEAR TERM. SUBSEQUENT TO THE ABOVE- MENTIONED AWARD TO JERRY WOLMAN, ADDITIONAL SPACE WAS REQUIRED WITHIN THE SAME GEOGRAPHICAL AREA AS THAT UNDER THE SOLICITATION OF DECEMBER 6, 1963. THE REQUIREMENTS FOR SPACE TO BE ACQUIRED WERE THE SAME AND AGAIN THE DELIVERY DATE WAS CRITICAL.

"ACCORDINGLY, IT WAS THEN DETERMINED, IN ACCORDANCE WITH SECTION 302 (C) (2) AND SECTION 302 (C) (10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, TO NEGOTIATE WITH ALL THOSE OFFERORS CAPABLE OF THE EARLY DELIVERY. IN VIEW OF OUR ABOVE MENTIONED FINDINGS REGARDING THE PROTESTANT'S SUBMISSION OF THE HECHT COMPANY PROPERTIES AT 613 G STREET AND 614 H STREET, NW., AND THE DETERMINATION THAT EARLY DELIVERY COULD NOT BE MET, COUPLED WITH THE ECONOMY ACT LIMITATIONS, THE FIRST NATIONAL REALTY CORPORATION WAS NOT CONTACTED FOR THE SUBMISSION OF AN OFFER.

"THEREAFTER AN AWARD WAS MADE TO THE VANGUARD ASSOCIATES FOR APPROXIMATELY 126,000 SQUARE FEET OF SPACE IN THE VANGUARD BUILDING, LOCATED AT 20TH AND L STREETS, NW., WASHINGTON, D.C., AT AN ANNUAL RENTAL RATE OF $4.89 PER SQUARE FOOT FOR A TEN-YEAR FIRM TERM LEASE.

"DURING THE NEGOTIATIONS FOR THE AFOREMENTIONED SPACE, CERTAIN ADDITIONAL URGENT REQUIREMENTS DEVELOPED AND AGAIN, IN ACCORDANCE WITH SECTION 302 (C) (2) AND SECTION 302 (C) (10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, IT WAS DETERMINED TO NEGOTIATE WITH ALL KNOWN PARTIES CAPABLE OF EARLY DELIVERY AND AGAIN BASED UPON OUR PREVIOUS FINDINGS, WHICH REMAINED UNCHANGED, THE PROTESTANT WAS NOT INVITED TO PARTICIPATE IN THE NEGOTIATIONS.

"THESE NEGOTIATIONS RESULTED IN AN AWARD TO THE 1717 MASSACHUSETTS AVENUE, INC., FOR APPROXIMATELY 88,000 NET USABLE SQUARE FEET OF SPACE AT AN ANNUAL RENTAL OF $4.89 PER NET USABLE SQUARE FOOT FULLY SERVICED FOR A FIVE-YEAR FIRM TERM.

"IN REGARD TO THE PROTESTANT'S ALLEGATION REGARDING THE DELIVERY DATE FOR THE SPACE ACQUIRED IT CAN BE UNEQUIVOCALLY STATED THAT THE LESSORS FULLY COMPLIED WITH THE INVITATION REQUIREMENTS REGARDING DELIVERY AND ANY DELAYS THAT OCCURRED WERE OCCASIONED BY THE GOVERNMENT AND THEREFORE WERE NOT THE RESPONSIBILITY OF AND WERE BEYOND THE CONTROL OF THE LESSORS.

"THE PROTESTANT'S FINAL ALLEGATIONS CONTAINED IN THE NOVEMBER 2, 1964, LETTER ARE ANSWERED AS FOLLOWS:

"1. GSA HAS NOT IGNORED THE PROTESTANT'S BIDS AND OFFERINGS BUT HAS ACTUALLY GIVEN EQUAL CONSIDERATION TO ALL THOSE WHICH HAVE BEEN SUBMITTED AND WILL CONTINUE TO DO SO; HOWEVER, GSA'S FUNCTION IS A FULFILLMENT OF SPECIFIED AGENCY SPACE NEEDS IN ACCORDANCE WITH THEIR REQUIREMENTS, AND OFFERINGS COVERING SPACE NOT MEETING THESE REQUIREMENTS CANNOT BE ACCEPTED.

"2. WITH REGARD TO THE ALLEGATION CONCERNING THE EXPIRATION OF BIDS OUR PROCEDURES IN THE ACQUISITION OF SPACE ARE GOVERNED BY LAW, RULES AND REGULATIONS AND COMPTROLLER GENERAL'S DECISIONS AND ALL ACTIONS TAKEN BY GSA ARE IN ACCORDANCE THEREWITH. ANY ACTION TAKEN ON THE PART OF THIS AGENCY IS SUBSTANTIATED BY APPROPRIATE FINDINGS OR DETERMINATIONS. WHERE CIRCUMSTANCES DICTATE CERTAIN SPECIFIC MEANS FOR ACCOMPLISHING OUR MISSION SUCH STEPS ARE TAKEN WHICH ARE IN THE BEST INTEREST OF THE GOVERNMENT AND NOT FOR THE BENEFIT OF SPECIFIC BIDDERS.'

WE HAVE SCRUTINIZED THE RECORD PERTAINING TO THE SUBJECT ACQUISITION AND WE PERCEIVE NO ABUSE OF DISCRETION ON THE PART OF THE PUBLIC BUILDINGS SERVICE IN THE CONDUCT OF NEGOTIATIONS PRECEDING THE ULTIMATE LEASES.