RTD Middleburg v. U.S.: Court Finds GSA Price Evaluation Lacked Clarity

In RTD Middleburg Heights, LLC v. United States, the Court of Federal Claims reviewed a lease procurement dispute involving Davis-Bacon Act wage considerations, cost estimation methods, and documentation gaps. RTD Middleburg Heights challenged the General Services Administration's award of a 15-year lease to Michael Downing Realty for Social Security Administration office space in Ohio. The court partially granted the protest, focusing on the accuracy and clarity of GSA's price evaluation.

Background of the Lease Procurement

The GSA issued a solicitation in 2019 for fully serviced office space between 6,363 and 6,681 square feet, with rent based on the proposed rate per rentable square foot and inclusive of build-out costs. The lease required compliance with applicable Davis-Bacon Act wage provisions, embedded through referenced FAR clauses.

Two proposals were submitted: one from incumbent lessor RTD Middleburg Heights, LLC and the other from Michael Downing Realty, who proposed constructing a new facility. After negotiations, final proposal revisions were submitted in March 2020. GSA initially awarded the lease to Michael Downing in February 2023 based on a lower present value analysis (PVA).

Protests and Reevaluations Centered on Replication Costs and Davis-Bacon Rates

RTD filed multiple protests challenging the lease award, arguing that GSA failed to incorporate relocation and build-out costs, and did not account for Davis-Bacon wage rates in its Independent Government Cost Estimate (IGCE). The Government Accountability Office (GAO) sustained the first protest, agreeing that the evaluation lacked justification for excluding certain cost inputs. This led GSA to conduct corrective actions and reevaluate proposals.

Subsequent protests alleged the agency used outdated cost estimates and failed to document how Davis-Bacon rates were factored into pricing. RTD contended that ignoring prevailing wage obligations skewed replication cost projections, violating statutory requirements under the Davis-Bacon Act. GSA defended the estimates as budgetary and said that Davis-Bacon applicability was not determinative.

Court Partially Grants Protest Over Evaluation Documentation

While the court rejected most of RTD’s challenges—including the claims about the Davis-Bacon Act assumptions—it found that the final PVA lacked transparency and consistency. GSA’s worksheet omitted explanatory detail, and the math used to calculate Michael Downing’s present value cost was not verifiable from the record. The court remanded the award decision, directing GSA to explain its methodology and submit corrected worksheets.

The court declined to vacate the lease award, ordering instead a 21-day remand for clarification. It emphasized that without complete documentation, the court could not determine whether the agency conducted a fair price evaluation or applied inputs consistently across offerors.

Davis-Bacon Contracting Evaluation

If you are involved in federal construction or service contracts and have questions about Davis-Bacon Act wage requirements or compliance obligations, our team at Whitcomb, Selinsky, PC can assist with prevailing wage classifications and related government contracting matters.