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GSA Told to Review $59M Building Award

Wednesday, August 28, 2013

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Federal auditors are urging the General Services Administration to revisit a contract award for a "top secret" federal building project because the agency failed to explain how it evaluated the bids.

The U.S. Government Accountability Office rapped the federal government's building construction and management arm for the process that led to its $59 million project award to Clark Construction Group LLC, of Bethesda, MD.


The General Services Administration is responsible for delivering much of the space requirements of federal agencies. GSA manages thousands of federal properties.

The GAO, an independent congressional watchdog agency, called the GSA's evaluation of the proposals "unreasonable" and said the agency had failed to explain why it rejected two bids by Grunley Construction Co. Inc., of Rockville, MD, which had originally submitted the low bid for the project.

The GAO order, dated April 3, was released in redacted form this month.

'Top Secret' Project

The case involves a May 1, 2012, solicitation for construction of infrastructure on a federal building in Washington, D.C.

GSA classified the project as "Top Secret" and estimated the fixed-price contract at between $50 million and $100 million. An independent government estimate put the project price at $59,226,767.

However, the solicitation noted several evaluation factors that "would be considered significantly more important than price" in awarding the "best value" project. These included past performance, the contractor's project management approach, and experience on similar projects, GSA said.

Both general contractors have vast government, commercial and institutional project portfolios. Grunley was founded in 1955; Clark, in 1906.

Capitol Area East Complex
Clark Construction Group LLC

Clark Construction Group LLC's portfolio includes the 2003 construction of the $241 million Capitol Area East Complex in Sacramento, CA. The company was founded in 1906.

Grunley's initial bid was $53,176,429; Clark's, $58,587,000. The document submissions were followed by oral presentations and revised proposals.

Low Cost Criticized

GSA then told Grunley that its bid included "significant deficiencies and weaknesses," including a price so low that the contractor "may not have understood the project requirements."

After reviewing Grunley’s bid book, GSA concluded that Grunley “did not understand the level of effort required for the project” and was "loading resources towards the beginning of the project and may not have priced the options for what they are worth.”

Grunley then revised its proposal to address GSA's questions and increased its bid to $62 million.

GSA then awarded the contract to Clark on Dec. 18, based on the company's higher evaluation and lower price.

Facts 'Simply Ignored'

Grunley protested, arguing that the GSA had not explained why it did not think the company could handle the job. GAO agreed, calling GSA's evaluation of Grunley's project management approach "unreasonable."

Argentine Embassy
Grunley Construction Co. Inc.

Founded in 1955, Grunley Construction Co. Inc. has annual revenues of more than $325 million. Its project portfolio includes exterior cleaning and repairs on the Argentine Embassy in Washington, D.C.

Grunley also noted that GSA had specifically criticized its proposal for failure to address both "float" (construction scheduling leeway) and shift transitions, when Grunley said it had addressed both in detail and cited specific pages.

"Again," wrote GAO, "despite the fact that the protester has pointed out that the 10-page schedule in its proposal included float in numerous instances, the agency has made no effort to further explain this aspect of its evaluation."

In responding to Grunley's arguments, GSA "has simply ignored the fact that the protester’s schedule included float in numerous instances...," GAO reported.

Grunley also noted that GSA had referred variously to one item of its proposal in different documents as a "weakness" and a "strength," without explaining the contradiction even when challenged on it.

Review Recommended

The GAO agreed, finding: "We cannot find this aspect of the agency's evaluation of Grunley's proposal to be reasonable, given the apparent inconsistency in the record regarding this aspect of the agency's evaluation, and the agency's failure during the course of this protest to meaningfully respond to the protester's arguments."

GAO General Counsel Susan A. Poling recommended that GSA reevaluate the two proposals and "make a new source selection." If Grunley's proposal is found on review to represent the best value, GSA should terminate Clark's contract, award the contract to Grunley, and reimburse Grunley for its costs in protesting the award, Poling wrote.


Tagged categories: Bidding; Construction; Contracts; General contractors; Government contracts; Maintenance + Renovation

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