The opinion of the court was delivered by: STANLEY SPORKIN
The plaintiffs in this case, Ralvin Pacific Properties (RPP) and its affiliate, Ralvin Pacific Development (RPD), are disappointed bidders in a government procurement to provide a building for the Veterans Administration (VA) in San Diego, California. The General Services Administration (GSA) ran the procurement and awarded the contract to MV Associates (MVA) on October 31, 1992. The plaintiffs have charged that there were a number of irregularities in the bidding process, including bias against them, fraud on the part of the awardee, and the improper disclosure of information by the GSA to the awardee between the first and second best and final offers (BAFO). Plaintiffs have requested that the contract be awarded to them, or in the alternative, that the procurement be conducted again in whole or in part.
1) On September 16, 1990, the GSA placed an advertisement in the San Diego Union, announcing that the GSA was looking to lease approximately 70,000 square feet of office and clinic space for the VA.
2) At the time, the VA was leasing space in a building at 2022 Camino Del Rio North in San Diego, owned and managed by RPP.
3) The GSA conducted on-site market surveys of a number of proposed sites, including those of the plaintiffs and the awardee, from October 16 through October 18, 1990.
4) Michael Cashman, the GSA realty specialist assigned to the VA procurement, conducted the inspections with representatives from the bidding companies. Afterwards, he filled out lease market surveys.
5) On the Ralvin survey he wrote that the proposed building was capable of meeting the government's requirements provided that confirmation was obtained that the site was not in a flood plain.
6) Cashman wrote on the MVA survey that it too was capable of meeting the government's requirements if the City of San Diego verified that it would build another means of entrance to and exit from the property. At the time, there was only one road into the site, which also is the road to Jack Murphy Stadium. On game days, the traffic on the road goes only to the stadium before the game and away from the stadium after games.
7) The GSA issued an extensive and detailed Solicitation For Offer (SFO) for the project on April 10, 1991. The SFO laid out the bases on which the award was to be made. There were five factors: 1) price, 2) handicapped accessibility, 3) early delivery of space, 4) availability of space for future expansion, and 5) the use of renewable energy in the offered space. Price was to be given weight equal to the four other factors combined.
8) In June 1991, both MVA and Ralvin made initial proposals to the GSA.
9) Ralvin initially proposed both a retrofit of the building the VA was occupying (the RPP proposal) and a build-to-suit building adjacent to the VA building (the RPD proposal).
10) RPP's proposal to retrofit the VA building did not meet the GSA requirement that the building's floorplate be over 20,000 square feet. As a result, RPP made an initial proposal, but never submitted either a first or second BAFO. The RPD proposal remained in consideration.
11) MVA submitted a proposal for a build-to-suit building on a site near Jack Murphy stadium as part of a proposed development to be called Mission City.
12) Both RPD and MVA submitted a first set of BAFOs by the November 15, 1991 deadline.
13) Sometime after the first BAFO, and before any determination had been made as to who was to be the prospective awardee, Michael Cashman submitted GSA Form 1503 to the GSA Credit and Finance Division in Kansas City (CFD) requesting that it do a financial capability determination of all three offerors.
14) In late 1991, the CFD made a negative financial determination on RPD. CFD found RPD financially incapable because it was a new company with no assets or liabilities, it lacked a firm guarantee by another company, and had provided no conditional commitment of funds.
15) The CFD was also unable to make a positive financial determination of MVA at the time because it had received only information on Fenton, an affiliate of MVA, and because there was no conditional commitment of funds to build the project.
16) Because of changes in the solicitation and deficiencies in all the offers in February 1992, the GSA decided to reopen negotiations with the bidders and announced a second round of BAFOs.
17) The GSA sent the bidders an amendment to the SFO (Amendment 6), which addressed the changes in the solicitation.
18) Amendment 6 was accompanied by a cover letter to each of the bidders, which announced the amendment and pointed out certain deficiencies to each offeror. The letter to RPD made no mention of the fact that the GSA was concerned that the RPD site was in a zone A floodplain or that there were problems with the financial information that Ralvin had submitted to the GSA.
19) The cover letter to Mark Greenberg, the broker for MVA, pointed out, among other things, that MVA had failed to provide certain essential financial information to the Credit and Finance Bureau, specifically, a conditional commitment of funds, as required in the SFO.
20) Following Amendment 6, the GSA established a March 27, 1992 deadline for the second BAFO.
21) In January, 1992 Mark Greenberg, the broker for MVA, received information from someone at the GSA that MVA had not been the "low offeror" in the first BAFO. Greenberg conveyed the information to MVA in a letter dated January 30, 1992 which stated as follows:
The legal department and financial review department [of GSA] cannot accept our Best and Final Offer submitted on November 15, 1991, because of legal issues (exceptions and ownership information) and we are not the lowest offeror. Negotiations for the subject requirement will be reopened in a few weeks. Mike Cashman is currently on leave until February 10, 1992, so nothing happens until he returns. (emphasis in the original)
22) At this point, RPD's offer was lower than MVA's -- $ 30.96 per square foot compared with $ 32.00 per square foot for the fixed term of the lease.
23) MVA, acting on the "not the lowest offeror" information provided in the Greenberg letter, changed its proposal between the first and second BAFO by offering 6 months of free rent, which lowered the price of its offer to $ 30.40 per square feet during the fixed term of the ...