Opinion ID: 1548862
Heading Depth: 1
Heading Rank: 3

Heading: The Factual Context: The Procurement Process and the Selection of D & K

Text: We first set forth the factual context for our analysis. In her deposition of January 23, 2006, Anita Morrison, a principal with Bay Area Economics (BAE), indicated that she had worked with the Office of the Deputy Mayor for Planning and Economic Development (DMPED) on a contract basis in 1999 or 2000. At the time, DMPED was examining opportunities to use government offices in the neighborhoods to spur economic development. One of the proposed centers, the Department of Motor Vehicles, was to be located at the Petworth metro site. [5] Later, BAE became a subcontractor on a District government contract (Office of Planning (OP)) relating to that site. Part of BAE's task was to examine the market for rental office and residential development at the site. Later, as part of BAE's contractual work with OP and DMPED, Ms. Morrison had input into the development of the RFP. She reviewed the three proposals submitted in response to the RFP for the Georgia Avenue Project and prepared an analysis for DMPED, which she submitted on December 1, 2003. Her comparative analysis, which focused on affordable housing, price/required subsidy, housing market support, retail development, risk to the District, and community amenities, discussed but did not rank the proposals. The RFP stated that a Selection Committee would be established to review and grade the submissions on a scale of 100 points. [A]t its sole discretion, the Committee would select one of the proposals. The RFP called for a Committee of four persons to rate the proposals; they were to be drawn from the following offices and agencies: DMPED, OP, DHCD (Department of Housing and Community Development), and DDOT (Department of Transportation). The RFP specified that the Committee would include an ex-officio, non-voting member of the community. Des Bracey, a special assistant to the DMPED assigned to work with the Committee, chose the members based on the respective expertise they could bring to the task of evaluation. [6] The fundamental purpose of the RFP was to obtain a developer for the Georgia Avenue-Petworth Metro Station site who would develop the site consistent with certain design goals and principles formulated by the District and the community surrounding the site. [7] The document contained three program elements in section 3.4: housing, retail, and parking. Under housing, the RFP envisioned 100 units minimum and indicated that [t]he community has expressed a preference for home ownership for residential development. Retail called for a minimum of 17,000 square feet on the ground floor; and as to parking, [d]evelopment teams [were] encouraged to consider and propose parking alternatives. The RFP detailed the submission requirements, the selection process, the evaluation criteria, the pre-proposal meeting, and the Committee's authority to develop questions and request responses from bidders. In addition to other information, the RFP stated, in part, in section 4.1: [f]or a submission to be complete, the [b]idder must submit information regarding: (1) its qualifications, experience and the financial feasibility of the project; (2) financial compensation (details about the financial offer and any limiting conditions); (3) details about the elements of the proposed development and the rationale for the particular architectural solution proposed; and (4) a plan for the use of local, small and disadvantaged business enterprises (LSDBE) as well as a plan for employment opportunities and community outreach. [8] Section 4.1 expressly stated: Should the Government of the District of Columbia require additional material, it will request the authorized representative [of the bidder] to furnish the necessary information. The RFP also highlighted six evaluation criteria in section 4.3 and the points to be assigned to each criterion (based on a total of 100 points): Qualifications, Experience and Financial Feasibility 25 Development Program and Concept Plans 20 Design Excellence 15 Financial Compensation 15 LSDBE Participation 15 Community Responsiveness 10 Section 4.3.4 specified: The proposing team's financial offer for either sale or ground lease will be evaluated in Present Value terms. Dependence on public subsidy will be included in the evaluation. Scoring will be proportional to the highest bidder. Section 4.3.6 highlighted the importance of community input and stated that the proposals will be scored based on achieving . . . community objectives relating to parking/traffic management; home ownership; the amount of space allocated to retail enterprises; and community amenities. According to section 4.5 of the RFP, the selected developer would be given ninety calendar days in which to reach agreement [with the District] on the construction schedule and construction milestone dates, any outstanding business and financial terms, and other matters. D & K, UDS, and a third entity, submitted proposals on October 31, 2003. D & K's proposal anticipated the entire project as a rental building, with [D & K] as a long-term owner, but D & K's proposal stated: If a For-Sale component is the final preference by the Selection Committee and Community, we have the flexibility to sell the townhouse units and/or the remaining 141 units. If the current economic conditions are present at project delivery, that may be a worthy option for all to consider. D & K's proposal did not rely on public financial subsidies. UDS proposed a mix of apartments and condominium units, and stated in its proposal letter: We require that the lot and improvements that comprise the rental components be granted a 10-year, 100% real property tax abatement on the incremental property taxes generated by the project in accordance with `High Rent Area' provisions of the District of Columbia Housing Act of 2002, in order to bring investment return on this component up to acceptable levels. Consistent with the RFP, D & K and UDS made oral presentations of their proposals to the Selection Committee on November 12, 2003, and at a Petworth community meeting on November 24, 2003. Committee follow-up questions were sent both to D & K and UDS via e-mail on December 4, 2003, through Mr. Bracey. D & K was asked, in part, (1) to confirm that it could provide condominiums for the project, without affect[ing] the price offered to the District for the land, the provision of affordable housing units per the RFP's requirements, or the absence of a public subsidy for the project; and (2) to address [its] ability to manage multiple simultaneous projects (the Georgia Avenue Project in Petworth as well as two projects in Columbia Heights). D & K replied on December 8, 2003. The Committee's questions to UDS, through Mr. Bracey, sought, in part: (1) more detailed evidence of [UDS's] ability to finance the [Georgia Avenue Project] as proposed; and (2) support for [UDS's] assumption of market-rate monthly apartment rents of $2.10-$2.40 per square foot (with parking spaces renting for $145 a month). After receiving UDS's response, Mr. Bracey sent an additional question to UDS on December 8, 2003, concerning UDS's requirement of a tax abatement. UDS responded to the inquiry that same afternoon. [9] Two days later, UDS, on behalf of PIP, sent a letter to the DMPED raising the possibility of its protest if the District allowed bidders to substantially change . . . their proposals from that which was originally submitted by them. Subsequently, on December 11, 2003, an architectural firm (Ehrenkrantz Eckstut & Kuhn), sent a memorandum to the DMPED containing the results of its review of architecture and urban design for the Petworth Metro Station. Based on quality of the submissions in this area, the architectural firm ranked D & K first and PIP [UDS] second. Mr. Bracey reported the recommendation of the Selection Committee to Eric Price, Deputy Mayor, DMPED on December 12, 2003. The Committee recommended immediate negotiations with D & K, and further recommended that PIP [UDS] be designated as the second place developer. The Committee focused on the following aspects of the submitted proposals: housing units (total, rental, and ownership); retail space allocated; parking spaces; dollar amount of land offer; and required District subsidy. [10] The Committee identified the follow-up questions presented to D & K and PIP and set forth their responses. The report included raw and scaled evaluation scores (based on an evaluation matrix) given the proposals by each of the raters; charts were included showing both the original scores and the modified scores after the responses were evaluated. Based on both the raw and scaled scores, three of the raters ranked D & K higher and the fourth rated PIP higher, and both the total raw and scaled scores favored D & K. A comparison of original and modified scaled scores evidences a greater drop from PIP's total original score than D & K's total original score. Prior to consideration of the responses to questions posed by the Committee, D & K's total scaled score was 80; that score dropped to 78.5 after consideration of the responses. In contrast, prior to the questions posed by the Committee, PIP's total scaled score was 72.5, but it dropped to 66.25 after the Committee considered PIP's responses. [11] The Committee's report explained its recommendation of D & K as follows: [T]he Selection Committee recommends the [D & K] proposal predominantly due to: 1) An unmatched corporate track record of successfully completing similar residential and mixed-use[] projects in the District and elsewhere. The Selection Committee believes that D[ & ]K, as the best qualified and most experienced developer, presents the greatest likelihood that the proposed project will be built on schedule; 2) An architectural design and plan that unanimously was judged the most excellent; and 3) The clearest, least ambiguous statement that its proposed project can be built without reliance on any subsidy in any form from the District. Additionally, advisory opinions issued by Bay Area Economics, a real estate consulting firm, and Ehrenkrantz, Eckstut & Kuhn, an architectural firm, strongly support the selection of [D & K]. The Committee's report commented on UDS's December 2003 letter raising the possibility of a bid protest due to the alleged possibility that bidders would be permitted or encouraged to change their proposals prior to selection. The report stated, in part: All contact between the government and the RFP respondents has been solely for the purpose of clarifying the submitted materials and performing necessary and proper due diligence in evaluating [the] proposals. The report also pointed out that PIP [UDS] arguably benefitted from the opportunity to respond to the question concerning the subsidy or tax abatement because two of the raters gave PIP the full ten points in the District subsidy category and a third rater awarded PIP five points. The Committee report summarized the rationale for selection of D & K as follows: It is the judgment of the Selection Committee that the proposal submitted by [D & K] represents the best overall opportunity for the site and is judged to be in the overall best interests of the District.