Losers appeal HCFA site decision Inner Harbor venture says process was unfair


The struggle over whether the headquarters for the federal Health Care Financing Administration will move to downtown Baltimore or stay in Baltimore County is not over.

The joint venture that proposed a 21-story building near Oriole Park at Camden Yards has filed a protest with the Government Accounting Office (GAO) asking it to overturn the awarding of the contract to a group that would build the government complex in Woodlawn.

"We were robbed," said Daniel Henson III, president of the Henson Co., one of the companies in the joint venture proposing the downtown site. "The government did not fairly consider our price," he said.

On Aug. 14, the General Services Administration (GSA), the federal agency in charge of arranging office space for the government, awarded a $122.6 million contract to Boston/Knott Limited Partnership to build a campus-style complex on 57 acres just west of HCFA's current Woodlawn headquarters. HCFA is the government agency that administers the federal Medicaid and Medicare programs.

The winning joint venture consists of Boston Properties Inc. of Boston and James F. Knott Development Corp. of Towson.

The loser in the battle was the Inner Harbor West Joint Venture, which includes the Rouse Co. of Columbia, Baltimore-based Whiting-Turner Contracting Co. and the Henson Co., a real estate developer.

City and county politicians also weighed in, attracted by HCFA's 3,300-person work force and the agency's new building, the area's largest construction project in a decade.

Despite the challenge, the winners are confident they will prevail.

"We have reviewed the protest and consider it to be totally without merit," said Raymond A. Ritchey, senior vice president of Boston Properties Inc. "We expect a prompt dismissal of the protest and should be in a position to proceed with the development of the HCFA facility immediately," he said in written response.

The three-page protest was filed with the GAO Wednesday, said Richard Burkard, the attorney with the GSA who has been assigned the case.

The GSA has until Sept. 25 to file a response, and the GAO's decision must be made by Dec. 30. The GAO decision will not be legally binding on the GSA, Mr. Burkard said, but is almost always followed in such cases.

The GAO is known primarily as the investigative arm of Congress. But the agency also has a 50-lawyer division that reviews protests of government contracts, Mr. Burkard said.

He declined to give the specifics of the protest but said it involved the following general charges:

* The General Services Administration did not properly evaluate the price of the Inner Harbor West proposal.

* The GSA failed to conduct meaningful discussions with the Inner Harbor West group.

* The GSA based its decision on evaluation criteria that were not stated in the bid solicitation.

* The GSA improperly waived stated evaluation criteria in making the award to Boston/Knott.

Mr. Burkard is responsible for collecting the information on the dispute and writing a draft decision, which is then reviewed by his superiors in the agency, he said. The dispute can be further appealed to federal courts.

Under the law, the government agency usually would stop work on a contract after a protest was filed with the GAO, unless it could be shown that there was a compelling reason to pursue the project, Mr. Burkard said.

Steve R. Peters, the GSA contracting officer for the project, said work on the HCFA effort has been suspended but that the GSA is considering asking for a waiver.

Groundbreaking for the project had been scheduled for February next year and completion for 1995.

The Inner Harbor West proposal has been widely reported as costing $16 million more than the Boston/Knott offer. But Mr. Henson disputed that figure and said it was a point of contention in the protest.

Robert Minutoli, senior development director for the Rouse Co., which is part of the group vying for the project downtown, declined to discuss the protest. "We are very uncomfortable about having a public discussion," he said, citing the complexity of the matter.

The issue of where to put the HCFA headquarters had become a political football. A November victory by Democratic presidential candidate Bill Clinton could add another wrinkle to the battle.

"I would assume a Democratic administration would take a more sympathetic point of view towards poor people," said Robert C. Embry Jr., president of the Abell Foundation and a backer of the downtown plan.

While Mr. Embry was an assistant secretary at Housing and Urban Development during the Carter administration, he said, the administration planned to build the HCFA headquarters downtown as part of its policy of trying to help the inner cities. But the Reagan administration killed that plan, he said.

A shift back to favoring the city could come with a Clinton victory, he said. "I would hope so," Mr. Embry said.

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