CESC Plaza Ltd. Partnership v. United States

52 Fed. Cl. 91, 2002 U.S. Claims LEXIS 90, 2002 WL 575691
CourtUnited States Court of Federal Claims
DecidedMarch 22, 2002
DocketNo. 01-715C
StatusPublished
Cited by13 cases

This text of 52 Fed. Cl. 91 (CESC Plaza Ltd. Partnership v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CESC Plaza Ltd. Partnership v. United States, 52 Fed. Cl. 91, 2002 U.S. Claims LEXIS 90, 2002 WL 575691 (uscfc 2002).

Opinion

OPINION

BRUGGINK, Judge.

Pending in this bid protest is plaintiffs’ motion for injunctive and declaratory relief. Also pending is defendant’s motion for judgment on the administrative record. Plaintiffs contend that modifications made to a contract between the General Services Administration (“GSA”) and intervenor exceeded the scope of permissible changes and that the project should have been resolicited. For reasons explained at the conclusion of oral [92]*92argument held on March 18, 2002, and as more fully set out below, we deny plaintiffs motion and grant defendant’s Motion for Judgment on the Administrative Record.

FACTUAL BACKGROUND

In November 1995, Congress granted the GSA, on behalf of the Patent and Trademark Office (“PTO”), authorization to procure a lease for up to 2,386,940 rentable square feet of office space to house the consolidated PTO in Northern Virginia. AR at 8407. The approved lease prospectus capped annual rent at $57,286,560, and the actual annual rent per rentable square foot at $24.00. Both rent caps were based on fiscal year 1996 dollars, with an annual escalation of 2.9 percent compounded to the effective date of the lease. AR at 8402. The project would constitute the largest lease ever executed by GSA.

On June 26, 1996, GSA issued Solicitation for Offers No. 96.004 (“SFO”), inviting offers to lease office space for the PTO. AR at 3651. The SFO had a two-phase selection process. Phase I was open to all potential offerors who met the minimum SFO qualifications. Phase I evaluated the quality of the proposed site, design team, and developer. AR at 3720. Once an offeror met Phase I qualifications, it was allowed to submit Phase II proposals. Offerors’ technical and pricing proposals were required during Phase II. The technical proposals were evaluated by quality of site, design, interior architect, and operating and maintenance firm. AR at 3724. On November 16, 1998 four offerors submitted initial Best and Final Offers (“BAFO”). The SFO was amended fourteen times. The most far-reaching of those was Amendment Twelve. AR at 4000-50. Plaintiffs are five Charles E. Smith Companies (“CESC”) which submitted a joint BAFO.

Before filing this suit, CESC lodged a preaward bid protest in 1999 under the Competition in Contracting Act (“CICA”), claiming that the SFO was inherently prejudicial to CESC. CESC Plaza Ltd. Partnership v. United States, C.A. No. 98-1837 (E.D.Va.1999), aff'd, 215 F.3d 1317 (4th Cir.2000). CESC was the incumbent on most of the PTO’s existing leases. It argued that the SFO did not properly take into consideration its unique position as an existing building owner instead of a bidder proposing to build a new building. Id. slip op. at 2. The district court preliminarily enjoined the procurement until GSA provided additional information and the offerors submitted new BAFO’s. Id. Permanent injunctive relief was denied on grounds that the SFO comported with CICA’s requirements. Id. slip op. at 26.

On June 1, 2000, GSA awarded the lease to intervenor, LCOR Alexandria, Inc. (“LCOR”). LCOR is a single-purpose entity created for the special purpose of this project. Its assets are those that the lease transaction has generated. This lease included a provision which stated:

The Government may terminate this Lease if, within one hundred eighty (180) working days of the date of execution of this Lease, the Lessor fails to obtain the requisite financing or fails to satisfy the other obligations set forth in Section 5.1.4 of this Lease, as such time frame may be extended by the Government pursuant to Section 5.1.5. Once such financing has been obtained and such other obligations have been satisfied and once all or any portion of the leased Premises has been substantially completed by the Lessor and has been accepted by the Government, the Government shall have no right to terminate the Space Lease portion of this Lease under any circumstances ... notwithstanding any other term or provision of this Lease to the contrary____

AR at 7058.1.

On February 2, 2001, seven months after award, LCOR advised GSA that the project costs exceeded its ability to finance the project. AR at 3104. LCOR presented GSA a list of proposed changes to the lease on March 9, 2001. The list was described by LCOR as “critical to successfully financing this project.” AR at 3112. GSA entered into a new lease with LCOR on December 19, 2001, GSA Lease No. GS-11B-LVA80671. AR at 1. One of the buildings contracted for was a parking garage, although very few parking spaces were actually included in the lease. A second lease, Lease No. USPTO 01-100A, was also executed between PTO [93]*93and LCOR. It involves the separate lease of 3561 parking spaces and the office space in townhouses constructed as a facade to the parking garage structure.

DISCUSSION

This court has jurisdiction to entertain “an action by an interested party objecting to ... any alleged violation of statute or regulation in connection with a procurement.” 28 U.S.C. § 1491(b)(1) (Supp.1999). Plaintiffs allege that the government violated 41 U.S.C. § 253(a), (b) (1994) and various Federal Acquisition Regulations by modifying the original lease between LCOR and GSA so that the parties circumvented the statutory requirement of competition.

To have standing to bring a bid protest, plaintiffs must be interested parties. “Interested parties” are defined as “actual or prospective biddei’s or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the contract.” American Fed’n of Gov’t Employees, et al. v. United States, 258 F.3d 1294, 1302 (Fed.Cir.2001) (citing 31 U.S.C. § 3551(2) (1994)). See also Myers Investigative and Sec. Serv., Inc. v. United States, 275 F.3d 1366, 1370-71 (Fed.Cir.2002) (stating that a contractor must “show that it would have been a qualified bidder.”) Plaintiffs were finalists in the competition for the lease under the original SFO and would presumably have bid again if the lease had been resolicited. We are satisfied plaintiffs have standing.

CICA demands “full and open competition through the use of competitive procedures.” 41 U.S.C. § 253(a)(1)(A). This requirement should not be avoided by using the device of a contract modification. See AT & T Communications v. Wiltel, Inc., 1 F.3d 1201, 1204 (Fed.Cir.1993); CCL, Inc. v. United States, 39 Fed.Cl. 780, 791(1997). Modifying the contract so that it materially departs from the scope of the original procurement violates CICA by preventing potential bidders from participating or competing for what should be a new procurement. See AT & T, 1 F.3d at 1204; VMC Behavioral Healthcare Serv. v. United States, 50 Fed.Cl. 328 (2001); CCL, 39 Fed.Cl. at 791; Graphic-Data, LLC v. United States, 37 Fed.Cl. 771, 781-82 (1997). It is to be noted, however, that CICA “does not prevent modification of a contract by requiring a new bid procedure for every change.”

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Bluebook (online)
52 Fed. Cl. 91, 2002 U.S. Claims LEXIS 90, 2002 WL 575691, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cesc-plaza-ltd-partnership-v-united-states-uscfc-2002.