GAO Does Not Recommend Cancellation of a Lease Because it Does Not Contain a Termination for Convenience Clause
In the bid protest of Progress for Bakersfield Veterans, LLC, B-414425.5 (January 28, 2019), the GAO would not recommend cancellation of a lease for a Community Based Outpatient Clinic ("CBOC"). In response to the bid protest, the VA took corrective action by agreeing to pay the protester its protest and proposal preparation costs. The protester objected to this corrective action, arguing it does not compensate it for the lost opportunity to compete for the procurement.
The GAO held that, because the lease was already awarded and it does not include a termination for convenience clause, they will not recommend termination of the awarded lease:
Absent a termination for convenience clause, our Office will not recommend termination of an awarded contract, even if we sustain the protest and find the contract award improper. New Jersey & H Street, LLC, B-311314.3, June 30, 2008, 2008 CPD ¶ 133 at 7 (citing 4 C.F.R. § 21.8(d)(upon sustaining a protest, GAO may recommend payment of the costs associated with pursuing the protest and bid and proposal preparation costs); Peter N.G. Schwartz Cos. Judiciary Square Ltd. Partnership, B-239007, B-239007.3, Oct. 31, 1990, 90-2 CPD ¶ 353 at 11. Instead, in such instances, our Office has found that the protester is entitled to the recovery of its proposal preparation costs and the costs of filing and pursuing its protest, including attorneys' fees. Federal Builders, LLC-The James R. Belk Trust, B-409952; B-409952.2, Sept. 26, 2014, 2014 CPD ¶ 285 at 8.
Although the GAO does not expressly say so, their logic is that, without a termination for convenience clause, the VA has no right to terminate the lease without being in breach of contract. An interesting twist to think about before you file a GAO protest involving a contract or lease without a termination for convenience provision.
