                United States Court of Federal Claims
                                         No. 18-298 C
                                    Filed: August 23, 2018
                                 Reissued: September 6, 20181

                                                  )
    EISENHOWER REAL ESTATE                        )
    HOLDINGS, LLC,                                )
                                                  )
                Plaintiff,                        )
                                                  )
    v.                                            )
                                                  )
    THE UNITED STATES,                            )
                                                  )
                Defendant,                        )
                                                  )
         and                                      )
                                                  )
    CSHV LINCOLN PLACE, LLC,                      )
                                                  )
                Defendant-Intervenor.             )
                                                  )

Sharon A. Roach, Potter & Murdock, P.C., Falls Church, Va., for plaintiff.

Matthew P. Roche, U.S. Department of Justice — Civil Division, Washington, D.C., for
defendant.

Seamus Curley, Stroock & Stroock & Lavan LLP, Washington, D.C., for defendant-intervenor.


                                   OPINION AND ORDER


SMITH, Senior Judge

        This pre-award bid protest comes before the Court on the parties’ Cross-Motions for
Judgment on the Administrative Record. Plaintiff, Eisenhower Real Estate Holdings, LLC
(“Eisenhower”), filed its Complaint on February 28, 2018, challenging the General Services
Administration’s (“GSA” or “Agency”) Request for Lease Proposals No. 9VA21222
(“Solicitation” or “RLP”). Plaintiff alleges, inter alia, that the Agency unreasonably waived
minimum RLP requirements when it issued Amendment 3, conducted a flawed present value
1
 An unredacted version of this opinion was issued under seal on August 23, 2018. The parties
were given an opportunity to propose redactions, and those redactions are reflected herein.
price analysis, violated procurement regulations, and engaged in unequal treatment of offerors.
Plaintiff’s Motion for Judgement on the Administrative Record (hereinafter P’s MJAR) at 2-4.
Furthermore, plaintiff alleges that the GSA’s evaluation of proposals was arbitrary, capricious,
and not in accordance with law and regulation. Id. at 2. Plaintiff seeks declaratory and
injunctive relief, attorneys’ fees, and any other relief that the Court deems just and appropriate.
Id. at 53. For the following reasons, plaintiff’s Motion for Judgment on the Administrative
Record is denied, and defendant and defendant-intervenor’s Cross-Motions for Judgment on the
Administrative Record are granted.

I.     Background

       On October 6, 2016, the GSA issued the Request for Lease Proposal No. 9VA2122.
Administrative Record (hereinafter “AR”) at 49. This RLP seeks to procure a lease for the
headquarters of the United States Department of Justice, Drug Enforcement Agency (“DEA”).
AR 1. CSHV Lincoln Place, LLC (“Lincoln,” “incumbent,” or “defendant-intervenor”) is the
incumbent lessor. AR 69. The RLP sought proposals for commercial office space up to 575,000
Rentable Square Feet (“RSF”). AR 49. The RLP also stated that an awarded lease may not
exceed the rate cap in Prospectus PVA-01-WA16 (“Prospectus”), which was submitted to
Congress on November 24, 2015. AR 1, 60.

        RLP section 1.02(D) required that offerors provide “85 structured/inside parking spaces,
reserved for the exclusive use of the Government.” AR 49. The “Agency Special
Requirements” section of the RLP stated that the “Government requires the right to fully control
and secure the parking garage, to include all vehicle and pedestrian entrances.” AR 117. While
RLP section 1.07 explained that the lease was to be fully serviced, the GSA draft lease attached
to the RLP stated that bids should exclude electric costs, as the DEA would pay them. AR 78.
The annual rent includes the building shell rent, the applicable Tenant Improvement Allowance
(TIA), operating costs, and Building Specific Amortized Capital. AR 65-67. The RLP also
included move and replication costs for all offerors, but it explicitly excluded costs stemming
from any additional non-Government parking spaces. AR 66.

        On November 4, 2016, Eisenhower and Lincoln both submitted their initial offers. AR
302, 569. Eisenhower offered a rental rate of $        /RSF and a conditional cash concession of
$ million. AR 574, 578. Lincoln offered a rental rate of $          /RSF and a
concession in lieu of          concession. AR 303. The GSA held discussions with offerors after
receiving initial offers, and, on June 21, 2017, both Eisenhower and Lincoln submitted revised
offers. AR 963, 1252. Eisenhower offered a revised rental rate of $        /RSF and reduced its
conditional cash concession to $ million. AR 1257, 1261. Lincoln offered a revised rental
rate of $ .50/RSF and included the                         concession. AR 1065.

        On July 6, 2017, the GSA held additional discussion with offerors, and on August 22,
2017, GSA requested that both offerors submit Final Proposal Revisions (“FPR”). AR 1361-66,
1379, 1562. Throughout the course of these discussions, the Agency advised Eisenhower that its
                                                    and reminded Eisenhower that electric costs
should be excluded. AR 1564. On September 6, 2017, both Eisenhower and Lincoln submitted
their FPRs. AR 1566, 1580. Lincoln offered a rental rate of $      /RSF and a $ million cash

                                                 2
concession that would become available at the lease award. AR 1575, 1577. Eisenhower offered
a rate of $     /RSF, lowered the                                               , and
provided a $ million cash concession under the same previously attached conditions. AR
1585, 1592.

        On February 15, 2018, the GSA issued Amendment No. 3. AR 290. The Amendment
clarified that only the 85 parking spaces for Government vehicles, as specified in paragraph
1.02(D) in the Prospectus, would count toward the net present value (“NPV”) evaluation. AR
296. The Amendment also asked that both offerors confirm that the pricing in their respective
FPRs remained unaffected. Id. Plaintiff responded by objecting to the Amendment and asked
that the GSA rescind it. AR 2070-71.

      Plaintiff filed its initial Complaint on February 28, 2018, and its Amended Complaint on
March 30, 2018. On April 18, 2018, plaintiff filed its Motion for Judgment on the
Administrative Record. Defendant and defendant-intervenor each filed their Cross-Motions and
Responses to plaintiff’s Motion for Judgment on the Administrative Record on May 25, 2018.
On June 5, 2018, plaintiff filed its Response to defendant and defendant-intervenor’s Cross-
Motions and Reply in Support of its Motion for Judgment on the Administrative Record.
Defendant and defendant-intervenor filed their Replies on June 22, 2018. The Court held Oral
Argument on July 17, 2018. Both motions are fully briefed and ripe for review.

II.    Standard of Review

        This Court’s jurisdictional grant is found primarily in the Tucker Act, which provides the
Court of Federal Claims the power “to render any judgment upon any claim against the United
States founded either upon the Constitution, or any Act of Congress or any regulation of an
executive department, or upon any express or implied contract with the United States . . . in cases
not sounding in tort.” 28 U.S.C. § 1491(a)(1). Although the Tucker Act expressly waives the
sovereign immunity of the United States against such claims, it “does not create any substantive
right enforceable against the United States for money damages.” United States v. Testan, 424
U.S. 392, 398 (1976). Rather, in order to fall within the scope of the Tucker Act, “a plaintiff
must identify a separate source of substantive law that creates the right to money damages.”
Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in relevant part).

        This Court has jurisdiction over bid protest actions pursuant to 28 U.S.C. § 1491(b). The
Court evaluates bid protests under the Administrative Procedure Act’s (“APA”) standard of
review for an agency action. Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir.
2005) (citing Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,
1332 (Fed. Cir. 2001)). An agency procurement action may be set aside only if it is “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with the law.” 28 U.S.C.
§ 1491(b)(4); 5 U.S.C. § 706(2)(A). “The arbitrary and capricious standard applicable [in bid
protests] is highly deferential.” Advanced Data Concepts v. United States, 216 F.3d 1054, 1058
(Fed. Cir. 2000). Agencies, and contracting officers in particular, are “‘entitled to exercise
discretion upon a broad range of issues confronting them’ in the procurement process.”




                                                3
        A Motion for Judgment on the Administrative Record pursuant to Rule 52.1 of the Rules
of the Court of Federal Claims (“RCFC”) determines whether the administrative body, given all
the disputed and undisputed facts in the record, acted in a manner that complied with the legal
standards governing the decision under review. Supreme Foodservice GmbH v. United States,
109 Fed. Cl. 369, 382 (2013). Under RCFC Rule 52.1, the parties are limited to the
Administrative Record, and the Court makes findings of fact as if it were conducting a trial on a
paper record. See Bannum, 404 F.3d at 1354. The Court must determine whether a party has
met its burden of proof based on the evidence contained within the Administrative Record. Id. at
1355. Unlike a summary judgment proceeding, genuine issues of material fact will not foreclose
judgment on the Administrative Record. Id. at 1356.

        When a plaintiff claims that the agency’s decision violates a statute, regulation, or
procedure, the protestor must show that the violation was “clear and prejudicial.” Impresa, 238
F.3d at 1333 (internal quotation marks omitted). The Court will “interfere with the government
procurement process ‘only in extremely limited circumstances.’” EP Prods., Inc. v. United
States, 63 Fed. Cl. 220, 223 (2005). “If the court finds a reasonable basis for the agency’s action,
the court should stay its hand even though it might, as an original proposition, have reached a
different conclusion as to the proper administration and application of the procurement
regulations.” Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989). The Court
cannot substitute its judgment for that of the agency, even if reasonable minds could reach
differing conclusions. Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281, 285-
86 (1974).

III.   Discussion

       A.      Amendment No. 3 & Parking Costs

         Plaintiff makes two arguments related to Amendment No. 3 and the parking provisions.
First, plaintiff alleges that the GSA “depart[ed] from its own policy in issuing Amendment No. 3,
whose sole purpose was to modify the calculation of parking costs so that [Lincoln’s] proposal
would not exceed the Maximum Rental Rate.” P’s MJAR. at 23. Second, plaintiff contends that
internal, parking-related discussions at the GSA support its claim that Amendment No. 3
materially changed the Prospectus. P’s MJAR at 45-46.

       The government contends that Amendment No. 3 was immaterial, and its sole purpose
was to clarify the RLP. Defendant’s Cross-Motion for Judgment on the Administrative Record
(hereinafter “D’s CMJAR”) at 21. Amendment No. 3 revised paragraph 3.05 of the RLP. AR
2072. The Amendment clarified that:

       “[o]ther than the cost of parking for the official government vehicles as described
       in paragraph 1.02D of [the] RLP, the cost of any other parking, as provided in
       Block 21 of Form 1364 of an offer, will not be evaluated in the [NPV] calculation
       for purposes of award, nor will it be included in the Government’s prospectus
       compliance analysis.”




                                                 4
Id. The GSA then requested confirmation that offeror’s pricing was not impacted by the
Amendment. Id.

        This Court is unpersuaded by either of plaintiff’s parking-related arguments. Plaintiff
argues that the GSA issued Amendment No. 3 in order to exclude the parking costs from
Lincoln’s NPV price analysis. P’s MJAR at 29. The Court is not convinced that Amendment
No. 3 had any impact on the NVP analysis. Instead, the Administrative Record indicates that
Amendment No. 3 simply clarified that only the 85 parking spaces for official government
vehicles would be considered under the NPV analysis. AR 292. As the Amendment merely
clarified an existing provision, the Court is not persuaded that it had any material impact on the
RLP.

        Plaintiff further contends that the GSA’s internal questions reflect the Agency’s intention
to amend the Solicitation in Lincoln’s favor. Id. at 46. However, the Administrative Record
makes it clear those discussions reflect internal confusion over the parking language. AR 2052.
During those discussions, the GSA expressed concerns that “the DEA customer security and
resulting parking control requirement might cause some confusion” for unfamiliar lessors. Id.
As a result of those discussions, the GSA directed the Contracting Officer (“CO”) to amend the
solicitation, clarifying that only the 85 parking spaces for official government vehicles would be
considered as part of the Prospectus compliance analysis. Id. The CO’s decision appears to fall
in line with the GSA’s past practices of only including security-related parking in evaluating
lease proposals. See AR 2064.

       Plaintiff knew or reasonably should have known that any parking spaces apart from the
referenced 85 spaces would not be included as part of the NPV. Each iteration of Eisenhower’s
proposal suggests that it understood that the NPV only included the 85 required parking spaces.
See AR 547, 1257, 1585. Plaintiff offers no real evidence that the GSA’s decision to issue
Amendment No. 3 was for the express purpose of benefitting Lincoln or that the Agency
harbored prejudice towards Eisenhower. As this Court has not determined that Amendment No.
3 was unreasonable, or that plaintiff was negatively impacted by its issuance, this Court finds
that Amendment No. 3 was not prejudicial to the plaintiff.

       B.      Electricity

       Eisenhower also alleges that the “GSA arbitrarily and capriciously excluded [defendant-
intervenor’s] electrical costs” from the evaluation, thereby violating both the Prospectus rate cap
and the requirement that the rate be fully serviced. P’s MJAR at 2. Fully serviced rates typically
include all operating costs, including electrical expenses. D’s CMJAR 24. However, the
Administrative Record indicates that both Eisenhower and Lincoln were aware that electrical
costs would not be included, as both offerors submitted final offers that excluded electric costs.
See AR 1585. Moreover, the Solicitation required offerors to indicate which utilities would be
excluded from rental consideration. AR 64. Both offerors included electrical costs in their
proposals, and the Agency excluded those electrical costs when analyzing both offers. As such,
the Court finds no support for plaintiff’s argument that the GSA excluded electrical costs to its
detriment.



                                                 5
       C.      $   Million Concession

       Plaintiff further alleges that the GSA irrationally considered and accepted Lincoln’s $
million cash concession as part of its NPV analysis, despite insufficient information about the
conditions attached to the concession. P’s MJAR at 27. Plaintiff contends that the cash
concession was conditional, and therefore non-compliant. Id. at 27-28. Plaintiff also argues that,
because the conditions were removed from the concession in the final offer, Lincoln’s
concession was illusory. P’s MJAR at 27. The Court is not persuaded by either argument.

        However, as the government points out, the cash concession was not a requirement of the
RLP, and accepting it along with its conditions was not a procurement violation. D’s CMJAR at
27. Plaintiff objects to the conditions attached to Lincoln’s cash concession. However, the
Administrative Record makes it clear that a cash concession was not a solicitation requirement,
but rather an optional element that could make an offer more competitive. See AR 152, 153. As
such, accepting the cash concession, along with its conditions, was not a procurement violation.

        Moreover, Lincoln’s conditions were substantially similar to the conditions attached to
Eisenhower’s $ million cash concession. Plaintiff’s FPR included, among other things, the
condition that the concession may not be used “to offset the initial [TIA].” AR 1592. Lincoln’s
proposal included a similar condition, stating that the concession may not be used to “pay down
the [TIA]”. AR 1913. As the conditions attached to both cash concessions were substantially
similar, plaintiff has not demonstrated that the Agency’s acceptance of Lincoln’s optional cash
concession was unfair.

         The Court is similarly unpersuaded by plaintiff’s argument that removing the conditions
from the concession offered in the FPR was unreasonable for the following reasons: (a) the
conditions did not affect the price or the NPV analysis in a material way; (b) the Solicitation did
not require conditions; and (c) Eisenhower has not demonstrated prejudice, as Lincoln’s
conditions were the same or substantially similar to those attached to Eisenhower’s cash
concessions. See AR 152, 153, 1913, 1592. Specifically, Lincoln’s FRP stipulated that the
Agency “at its sole option, may use this Additional Cash Allowance in any combination it
determines, including, but not limited to, funding tenant improvements to the Leased Premises,
for reimbursement of additional services and/or as additional free rent.” AR 1913. Eisenhower
also listed several ways in which the Agency could use its cash concession, including “fund[ing]
tenant improvements” and “as rental abatement upon lease commencement.” AR 1592.

        It seems clear to this Court that the GSA’s conduct was not biased against Eisenhower.
Furthermore, as the value of Lincoln’s cash concession remained unchanged after Lincoln was
selected as the apparent successful offeror (“ASO”), the concession was not materially modified.
As such, the Court finds that accepting Lincoln’s $ million cash concession was neither
arbitrary nor capricious.

       D.      Unfair Discussions/Continued Negotiations

       Plaintiff argues that the communications between the GSA and defendant-intervenor after
Lincoln was identified as the ASO were “unequal” and improper. P’s MJAR at 32. Specifically,

                                                 6
plaintiff alleges that those discussions violated Federal Acquisition Regulation (“FAR”)
15.306(a). Id. Given the terms of the RLP, the relevant provisions of the FAR, and the
controlling precedent, the Court is unpersuaded by plaintiff’s argument. The Solicitation
specifies that the selected offeror would engage in clarifying conversations with the GSA in
order to finalize the lease. AR 67, 1365, 1564.
        Regardless, plaintiff takes issue with the communications that occurred after Lincoln had
been identified as the ASO. Plaintiff fails to recognize that communication between the GSA
and the successful offeror, after its identification as the ASO, differs from the type of discussions
that proceed final proposal revisions. In fact, the controlling statute expressly distinguishes the
two types of communication. FAR 15.306(a) defines clarifications as “limited exchanges” that
are intended to give offerors “the opportunity to clarify certain aspects of proposals [. . .] or to
resolve minor or clerical errors.” FAR 15.306(a). FAR 15.306(d), in turn, states that
“negotiations are exchanges…between the Government and offerors, that are undertaken with
the intent of allowing the offeror to revise its proposal.” FAR 15.306(d). When those
negotiations are “conducted in a competitive acquisition, they…are called discussion.” Id.

        Furthermore, this Court has recognized the difference between discussions and
clarifications, and has previously held that “[u]nlike discussions, which must be conducted
equally with all offerors within the competitive range, see FAR 15.306(d)(1), an agency has the
discretion to engage in clarifications with just one offeror.” Mil-Mar Century Corp. v. United
States, 111 Fed. Cl. 508, 535 (2013) (citing to DynCorp Int’l LLC v. United States, 76 Fed. Cl.
528, 540 (2007)). Here, after Lincoln was selected as the ASO, the GSA engaged in clarifying
conversations with Lincoln pursuant to FAR 15.306(a). These exchanges included adjusting
meeting times, setting security requirements for a guard booth, and implementing clerical
changes to the Lease. AR 2427-2428, 2430-2432, 2440-2443. As those exchanges conformed to
the terms of the Solicitation, adhered to the FAR, and conformed to relevant precedent, the Court
finds no basis for the unfairness and violation that the plaintiff urges.

       E.      Final Offer Submissions

         Arising out of its belief that the Agency’s clarifying communications constituted the type
of discussions that precede proposal revisions, plaintiff contends that the GSA should have
allowed plaintiff to revise its proposal. P’s MJAR at 37. In pursuit of that argument, plaintiff
cites to FAR 15.307, which states, in relevant part, that “[a]t the conclusion of discussions, each
offeror still in the competitive range shall be given an opportunity to submit a final proposal
revision.” Id. (citing FAR 15.307). Plaintiff further points to FAR 15.306(d), which states that
“[n]egotiations are exchanges, in either a competitive or sole source environment, between the
Government and offerors, which are undertaken with the intent of allowing the offeror to revise
its proposal.” Id. (citing FAR 15.306(d)).

       The FAR also provides that, while revisions to proposals after FPRs have been submitted
are generally not considered, “a late modification of an otherwise successful proposal, that
makes its terms more favorable to the Government, will be considered at any time it is received
and may be accepted.” FAR 15.208(b)(2). This provision has been incorporated into the GSA’s
procurement regulations. See General Services Acquisition Regulation (“GSAR”) 570.303-3



                                                  7
(“Follow the procedures in FAR 15.208.”). This provision was also expressly incorporated into
the Solicitation. See AR 133.

         Eisenhower correctly characterizes the timing of the events. Plaintiff states that
“following the submission of FPRs on September 6, 2017, [the] GSA engaged in further
discussions with [Lincoln], and [Lincoln] only.” P’s MJAR at 38. Plaintiff contends that “[a]s a
result of these improper ‘discussions,’ [Lincoln] materially modified its proposal by reducing its
parking costs by over $         —from $        million to $      million.” Id. Plaintiff then posits
that it should have been afforded the opportunity to revise its offer, after the submission of final
offers and in response to Lincoln’s modifications. This argument is unpersuasive.

       Once an agency has identified an ASO, it is not required to allow other offerors to submit
revised offers. The GSA had already identified Lincoln as the apparent successful offeror. AR
2413. Once that designation was made, the Solicitation allowed Lincoln to modify its terms
based on clarifying exchanges, and the GSA could consider and accept those modifications. AR
67. As such, the Agency’s decision not to allow plaintiff to provide additional proposal
modifications after Lincoln was identified as the ASO was neither arbitrary nor capricious.

        Plaintiff has failed to sufficiently demonstrate that the Agency acted arbitrarily and
capriciously throughout the course of the Solicitation. The GSA offered Amendment No. 3 to
clarify parking requirements. The exclusion of electric costs and acceptance of the $ million
cash concession were reasonable, and neither materially or unfairly impacted the NPV
evaluations. The clarifying discussions between the GSA and Lincoln after the ASO
determination did not constitute unequal discussions, and the GSA was under no obligation to
allow new or revised offers. As such, the Agency’s actions were neither arbitrary, capricious,
nor contrary to law.

IV.    Conclusion

       For the reasons set forth above, plaintiff’s MOTION for Judgment on the Administrative
Record is DENIED. Defendant and defendant-intervenor’s CROSS-MOTIONS for Judgment
on the Administrative Record are GRANTED. The Clerk is directed to enter judgment in favor
of defendant and defendant-intervenor, consistent with this opinion.2

      IT IS SO ORDERED.
                                                     s/   Loren A. Smith
                                                     Loren A. Smith,
                                                     Senior Judge




2
        This opinion shall be unsealed, as issued, after September 6, 2018, unless the parties
identify protected and/or privileged materials subject to redaction prior to that date. Said
materials shall be identified with specificity, both in terms of the language to be redacted and the
reasons therefor.
                                                 8
