In a recent decision, the Government Accountability Office (GAO) found the General Services Administration (GSA) improperly awarded a lease to a firm whose proposal failed to comply with a material solicitation requirement.[1] Despite this finding, GAO did not recommend that GSA terminate the lease—leaving the protester only to possibly recover its “proposal preparation costs, as well as the costs of filing and pursuing its protest, including reasonable attorneys’ fees.” GAO’s decision presents an important question to disappointed offerors considering protesting a government lease award: is it worth it?
The Facts
The facts of this case are relatively straightforward. GSA issued a solicitation, seeking the award of a twenty-year lease of office space in the Atlanta, Georgia area. The solicitation contemplated award to the lowest price, technically acceptable offeror. As relevant here, the solicitation required the offered property be located within a certain proximity of a “subway, light rail, or bus rapid transit stop” to be technically acceptable.
The protester challenged GSA’s award decision, asserting the awardee’s property was not located within the required proximity of a “subway, light rail, or bus rapid transit stop,” and GAO agreed. GAO found the term “bus rapid transit stop,” as used in the solicitation, has a specialized meaning and the awardee’s property, while located within the vicinity of a bus stop, did not satisfy the requirement to be within a certain proximity of a “bus rapid transit stop” or any other mode of rapid transit. Accordingly, GAO held that “GSA improperly evaluated [the awardee’s] proposal with regard to the proximity of the proposed property to rapid transit.”
While GAO found a prejudicial error in the procurement process, its recommended relief likely left the protester disappointed. GAO explained “the lease does not contain a termination for convenience clause” and “[i]n the absence of a termination for convenience of the government clause, we ordinarily do not recommend termination of an awarded lease, even if we sustain the protest and find the award improper.” In this case, GAO did “not find any basis to recommend termination” and only “recommend[ed] that the protester be reimbursed its proposal preparation costs, as well as the costs of filing and pursuing its protest, including reasonable attorneys’ fees.” Put differently, GSA can maintain its twenty-year lease with the awardee and the protester can only potentially recover certain costs, which likely fall well short of those it would earn under the lease if it received the award.
Takeaway
GAO’s decision highlights an important consideration for contractors thinking about protesting a lease award. GSA’s standard lease form (Standard Form 2) does not include a termination for convenience provision, and GAO decisions consistently stand for the proposition that “absent a termination for convenience clause, [GAO] will not recommend termination” as a remedy.[2] Thus, where an agency already has awarded a lease—which likely does not include a termination for convenience clause—the possibility of obtaining meaningful relief, i.e., a new award decision, from a GAO protest, is exceedingly rare. At least one GAO decision provides for the possibility of meaningful relief if the protester can show “the illegality of the award is plain or palpable,” i.e., “the award was made contrary to statute or regulation due to improper action by the contractor, or . . . the contractor was on direct notice that the procedures followed were violative of statutory or regulatory requirements.”[3] Short of that, however, potential protesters should understand that the recommended relief from GAO in such circumstances may be limited.[4] And the potential for only limited relief may go a long way in answering the question: is it worth it to protest?
If you have questions about filing or defending a bid protest or bid protest-related matters, please contact Katie Burrows or Eric Valle, the authors of this blog, or another member of PilieroMazza’s Bid Protests or Government Contracts practice groups.
[1] BOF Ga Lenox Park, LLC, B-421522 (June 20, 2023).
[2] See, e.g., Peter N.G. Schwartz Companies Judiciary Square Ltd. P’ship, B-239007 (Oct. 31, 1990).
[3] Id.
[4] At least one bid protest decision from the Court of Federal Claims suggests the Court may enjoin the award of a lease despite the lack of a termination for convenience clause. In Springfield Parcel C, LLC v. United States, 124 Fed. Cl. 163, 195 (2015), the government argued that the Court should not enjoin its award of a lease, in part, because it already entered into the lease, which did not contain an applicable termination for convenience clause. The Court found the government’s arguments unpersuasive, explaining “if the government is correct, then all of GSA’s leases are immune from post-award injunctive relief. This cannot be correct.” Id.
