Government Contracts & Investigations

When Selecting Protest Grounds, Don’t Forget the Prejudice

By | March 5, 2020

Sometimes the most basic rules can be the easiest to forget. One case in point relates to the key role of competitive prejudice in successful protests. No matter how often contractors hear it, this reality bears repeating, early and often: competitive prejudice is an essential element of a viable protest. In protest after protest, disappointed bidders either forget this fundamental rule or misjudge the strength of their argument that the government’s actions prejudiced their ability to compete. The Government Accountability Office’s recent decision in 100 Westminster Partners, LLC, B-418216; B-418216.2; B-418216.3 (January 27, 2020) provides yet another stark example of the importance of competitive prejudice. Simply put, without it you will not win.

The matter involved the award of a lease for office space to Providence Financial Plaza (Providence), LLC by the General Services Administration (GSA) under a request for lease proposals (RLP). The RLP contemplated a 15-year lease of approximately 20,000 square feet of office space in Providence, Rhode Island, for the United States Attorneys’ Office (USAO). As relevant here, the solicitation provided that the agency would determine the lowest price by conducting a present value price evaluation. Significantly, the award was to be made to the lowest-priced technically acceptable offeror.

The GSA received technically acceptable lease proposals from Providence and the protester, Westminster Partners, LLC (Westminster). After conducting the present value price evaluation, the agency calculated that Providence’s evaluated price was $34.13 per square foot (SF), and Westminster’s was $39.19 per SF. Concluding that Providence submitted the lowest-priced, technically acceptable proposal, the GSA awarded it the lease.

Westminster protested, raising a number of grounds, including the claims that the agency (i) failed to include replication costs in its present value price evaluation and (ii) improperly used the same relocation costs for Westminster and Providence even though Westminster would be moving tenants one floor while Providence would have to relocate tenants to a new building. The RLP explained that the agency would perform a present value price evaluation of the proposed rent per SF, which would result in a gross present value price, then add replication costs (a tenant improvement allowance) and the cost of relocation.

As noted above, the agency’s initial present value evaluation resulted in evaluated prices for Providence and Westminster of $34.13 / SF and $39.19 / SF, respectively. However, the agency did not consider relocation costs for either offeror in the initial evaluation, because the tenant would be required to move whether the lease was awarded to Westminster or Providence.

In response to the protest, the agency reviewed the present value analysis and noted that it had used the wrong replication cost figure for Westminster and had failed to include the relocation costs for either offeror. After the GSA corrected those errors and recalculated the present value analysis using the methodology set forth in the RLP, the offerors’ evaluated prices changed to $35.33 / SF for Providence and $43.04 / SF for Westminster. Thus, while Westminster was correct that the agency made mistakes in the initial evaluation, those mistakes did not change the outcome. Providence remained the lowest-priced, technically acceptable offeror. And since Westminster did not demonstrate that the GSA’s errors were prejudicial, the GAO denied the present value price evaluation protest ground.

While the lack of competitive prejudice is not always as objectively demonstrable as in this matter, the basic rule applies to all protests: unless the protestor shows prejudice, it cannot prevail even if all of its factual assertions turn out to be 100% accurate. Put another way, there’s no point in pursuing a protest claim unless you can prove prejudice. If you can’t, you’re wasting your time.

Contact Eric Whytsell for more information.