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Capital Business
Posted at 04:53 PM ET, 06/20/2011

GAO upholds protests over Health and Human Services lease in Rockville

The Government Accountability Office announced Monday that it had upheld the protests of three developers over the award of a 15-year lease extension for office space for the U.S. Department of Health and Human Services that would keep that agency in Rockville.

The lease, for 1.2 million square feet, was the subject of fierce competition between the agency’s current landlord and other developers looking to start new mixed-use projects, with county leaders and members of Congress from Montgomery and Prince George’s counties advocating for proposals from their jurisdictions.

In March, the General Services Administration announced that it would keep the agency in its current location in the Parklawn Building, at 5600 Fishers Lane, near the Twinbrook Metrorail station. But three other Maryland developers protested the procurement process -- One Largo Metro LLC, Metroview Development Holdings LLC and King Farm Associates LLC -- and on Monday the GAO sustained those protests.

“Our review of the record led us to conclude that the GSA evaluation was flawed because the GSA failed to evaluate offers in the way it had outlined in the solicitation. We also held that GSA failed to properly document its selection decision,” the GAO said in a press release issued Monday.

The General Services Administration declined to comment Monday.

Ralph O. White, managing associate general counsel for procurement law at the GAO, said in a phone interview that the GSA had not properly evaluated and documented the proposals according to the amenities accessible to each proposed site, such as restaurants, gas stations and other retail and services.

“We felt that they didn’t really do a reasonable job considering the various proposals as to their access to amenities,” White said. The GAO recommended that the proposals be reconsidered in accordance with the solicitation. It denied a number of other challenges by the protesters.

Under contracting rules, the GSA has 60 days to respond to the ruling.

Should the GSA reconsider the proposals and choose another site it would mean a major setback for the JBG Cos., the Chevy Chase-based developer that is part of a joint venture that owns the Parklawn Building and has been fighting to retain HHS. However, a reconsideration for the GSA could give new hope to Prince George’s County companies that are hoping to use the lease to bring new projects to the county’s Metrorail stations.

By  |  04:53 PM ET, 06/20/2011

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