BNUMBER:  B-274689
DATE:  December 26, 1996
TITLE:  Tidewater Homes Realty, Inc.

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Matter of:Tidewater Homes Realty, Inc.

File:     B-274689

Date:December 26, 1996

Freida V. Rapp and Kenneth S. Rapp for the protester.
Virginia Kelly Stevens, Esq., and Jane D. Atkinson, Department of 
Housing and Urban Development, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency's best value award selection is not reasonably supported 
where the record reflects that the selection of the awardee was based 
on an unequal evaluation of the protester's and awardee's proposals.

2.  Agency improperly waived definitive responsibility criterion which 
required the awardee possess a Virginia Real Estate Broker License at 
the time of award, where the agency determined the awardee to be 
responsible, despite not possessing the license.

DECISION

Tidewater Homes Realty, Inc. protests the award of a contract to 
CitiWest under request for proposals (RFP) No. H03R95062400000, a 
total small business set-aside, issued by the United States Department 
of Housing and Urban Development (HUD), for real estate asset manager 
(REAM) services for single-family properties owned by HUD or in its 
custody in Virginia Beach, Virginia area under a firm, fixed-price, 
indefinite quantity, contract for a base year with 4 option years.
     
We sustain the protest.

The RFP, issued as a small business set-aside on June 1, 1995, 
provided for a best value award with the technical evaluation being 
worth more than cost/price.  The RFP listed the following technical 
evaluation factors and corresponding values:

     1.  Demonstrated experience in the management of single-family 
     properties similar to and in a like area as those covered by this 
     solicitation.  [25 points]

     2.  Demonstrated experience in developing lists of needed 
     repairs, such as is required by HUD's Minimum Property Standards 
     (MPS), and estimating the cost of repairs.  [25 points].

     3.  Demonstrated experience in soliciting repair bids, 
     coordination and overseeing repair work, and inspecting for 
     satisfactory work completion.  [15 points]

     4.  Demonstrated experience in managing a rental program, 
     including establishing fair market rentals and collections from 
     present and former tenants, for single-family properties.  [10 
     points]

     5.  Understanding of HUD objectives and the required tasks as 
     specified in the solicitation.  [10 points]

     6.  Evidence of adequate office--staffed with appropriately 
     trained staff and equipped appropriately (or the ability to 
     establish such), reasonably located so as to provide convenient 
     service to HUD and its clients in the area to be served, and to 
     carry out all duties specified in the solicitation.  [15 points]

As part of their technical proposal, offerors were required to submit 
a completed Form 477, List of Repairs (included in RFP), for a 
specified property in Virginia Beach.  Offerors were cautioned that:

     "Proposals submitted without this form will not be disqualified 
     from competing for the award, but omission of the form may 
     adversely affect the offeror's technical points achieved in 
     [factor 2]." 

In addition the RFP required:

     "The contractor must supply with its Technical Proposal evidence 
     of its Virginia Real Estate Broker License--in the contractor's 
     name as it appears on the offer--to be determined responsible and 
     eligible for award."  [Emphasis in original.]

At the pre-proposal conference, a HUD official stated that if evidence 
of the foregoing license were not included in the proposal, "evidence 
of [the offeror's] ability to provide the license at award must be 
provided."  The RFP expressly stated that proposals would be initially 
screened to ensure that they contained a Form 477 for the specified 
property and evidence of a Virginia Real Estate Broker License.
 
HUD received 12 initial proposals by November 13.  Tidewater, whose 
principals were a manager and former employee of the local incumbent 
contractor performing these services, and CitiWest, from Tucson, 
Arizona, both submitted proposals.  A technical evaluation panel 
(TEP), comprised of members from the regional contracting office in 
Philadelphia, Pennsylvania evaluated proposals.  Five proposals, 
including those of Tidewater and CitiWest, were included in the 
competitive range.  Three of the proposals, including CitiWest's, with 
a score of 91 points, were found technically acceptable and two, 
including Tidewater's, with a score of 37 points, were found capable 
of being made acceptable.  

By letter of June 21, 1996, HUD conducted discussions with the 
competitive range offerors, during which it advised Tidewater of the 
weaknesses and/or deficiencies in its proposal.  HUD received best and 
final offers (BAFO) by July 9.  CitiWest's BAFO at an evaluated unit 
price of $1,317 received the same technical score of 91 points.  
Tidewater's BAFO at an evaluated unit price of $1,233 received a 
technical score of 47 points.  

The TEP rated Tidewater's BAFO relatively low under five of the six 
evaluation factors, finding that Tidewater's proposal lacked pertinent 
detail in many respects.  In contrast, CitiWest's proposal received 
high point scores under all of the factors and was determined to be 
reasonably priced.  HUD determined that CitiWest's technically 
superior proposal was worth the additional cost because it would 
likely have fewer performance problems, resulting in less costs to the 
government, and made award to that firm on August 23.  This protest 
followed.

Tidewater protests that its proposal contained the required pertinent 
details and was misevaluated.  Tidewater claims that the 
Philadelphia-based TEP was biased against Tidewater, as well as other 
locally based companies, and that HUD may have harbored resentment 
against Tidewater due to actions that Tidewater undertook in a prior 
procurement.  Tidewater notes that it submitted essentially the same 
proposals in response to HUD procurements for similar REAM services 
that a HUD Richmond-based TEP rated very favorably.  Tidewater also 
claims that CitiWest did not have the Virginia Real Estate Broker 
License in its name at the time of award as required by the RFP.

The evaluation of proposals is a matter within the discretion of the 
contracting agency.  Our Office will only question the agency's 
evaluation where it lacks a reasonable basis or conflicts with the 
stated evaluation criteria for award.  SC&A, Inc., B-270160.2, Apr. 
10, 1996, 96-1 CPD  para.  197.  The record must reasonably support the 
evaluation of the proposals, Intown Properties, Inc., B-262236.2; 
B-262237.2, Jan. 18, 1996, 96-1 CPD  para.  89, and it is fundamental that 
the contracting agency must treat all offerors equally; it must 
even-handedly evaluate offers against common requirements and 
evaluation criteria.  Sci-Tec Gauging, Inc.; Sarasota Measurements & 
Controls, Inc., B-252406; B-252406.2, June 25, 1993, 93-1 CPD 494; 
Secure Servs. Technology, Inc., B-238059, Apr. 25, 1990, 90-1 CPD  para.  
421.  As illustrated by the examples below, our review of the record 
reveals that CitiWest's and Tidewater's proposal were unequally 
evaluated under the RFP's evaluation factors.[1]

For example, under Factor 2, Tidewater's proposal received 6 points, 
while CitiWest's proposal received 24 points.  Tidewater's low score 
was attributed to an asserted lack of detail and clarity contained in 
the submitted Form 477 on the Virginia Beach property specified in the 
RFP and questions regarding Tidewater's ability to prepare cost 
estimates.  These evaluated problems were brought to Tidewater's 
attention during discussions.  In its BAFO, Tidewater basically 
explained, with some further elaboration, why it believed the 
submitted Form 477 and repair list satisfied the agency's requirements 
as stated in Factor 2[2] and its method for preparing cost estimates.  
The TEP rated Tidewater's BAFO with the same score because the Form 
477 still did not contain sufficient detail and because Tidewater's 
initial response regarding the preparation of cost estimates caused 
the TEP to question the validity and sincerity of Tidewater's response 
in its BAFO.  

Our review of Tidewater's BAFO indicates that the information 
contained in its Form 477 and its overall response to this factor 
contained much the same substantive detail as CitiWest's proposal.  
Based on our review of the two proposals, we cannot identify what 
specific details are missing from, or unclear in, Tidewater's Form 477 
with attachments.  HUD does not explain what details are missing or 
what is unclear; nor does it comment upon the accuracy of the needed 
repairs on the specified property as identified by Tidewater.  

On the other hand, while CitiWest's technical proposal seemed to 
address the same categories of information for repairing a specific 
property as required in a Form 477, no Form 477 was included in its 
proposal, despite the RFP's admonitions, and the property which was 
assessed by CitiWest under this factor was one that CitiWest was 
responsible for in Camden, New Jersey (under a REAM contract 
apparently administered by the Philadelphia HUD office), rather than 
the Virginia Beach property identified in the RFP.[3]  We do not 
believe the evaluators could have reasonably rated CitiWest's proposal 
with close to the maximum score and much more favorably than 
Tidewater's proposal for this factor, given CitiWest's failure to 
provide a Form 477 for the specified property as was requested in the 
RFP.[4]

Moreover, we find questionable HUD's explanation concerning its 
failure to credit Tidewater under Factor 2 for its apparently 
appropriate BAFO response as to who will prepare cost estimates for 
this work, since agencies are generally required to credit offerors 
for explanations in response to discussion questions.  Intown 
Properties, Inc., supra.  Under the circumstances, the record suggests 
disparate evaluation of the two proposals under this factor.  

Another example of unequal treatment involves the evaluation of Factor 
6.  The TEP awarded Tidewater's proposal a final score of 7 out of 15 
points for this factor and CitiWest's proposal 12 points.  The agency 
downgraded Tidewater's proposal because it was allegedly vague as to 
location of the office space and the division of responsibilities 
among staff members.  Here again, our review indicates that 
Tidewater's BAFO and overall technical response to this factor was 
specific as to prospective locations, staff, and equipment.  In 
contrast, CitiWest's proposal did not identify any specific location 
or staff in its proposal, but stated only how it would do so if 
awarded the contract.

Finally, Tidewater argues, and our review confirms, that CitiWest did 
not provide a Virginia Real Estate Broker License with its proposal.  
While CitiWest proposed to promptly obtain the license after award, 
Tidewater notes that its investigation reveals that CitiWest has not 
obtained the license and HUD has not disputed this assertion.  In any 
event, the requirement that the offeror furnish a specific license to 
be eligible for award was a definitive responsibility criterion that 
had to be satisfied as prerequisite for award.[5]  RSI Realty Servs. 
Inc., B-262238, Dec. 12, 1995, 95-2 CPD  para.  252 (finding the same 
requirement imposed in a REAM service procurement conducted by the HUD 
Philadelphia office to be a definitive responsibility criterion which 
was waived for CitiWest).  By finding CitiWest responsible and making 
award to that firm, the agency effectively waived the requirement for 
possession of the license prior to award.[6]  Where an agency waives 
such a requirement, it is required to amend the RFP; an agency's 
failure to amend represents unequal treatment of the offerors.  See 
Topley Realty Co., Inc., 65 Comp. Gen. 510 (1986), 86-1 CPD  para.  398.

In sum, as illustrated by the foregoing examples, we find that 
Tidewater's proposal was evaluated unequally vis-a-vis CitiWest's 
proposal.  Thus, we cannot conclude that the award to CitiWest is 
reasonably supported, and we sustain the protest on this basis.  
Intown Properties, Inc., supra; Sci-Tec Gauging, Inc.; Sarasota 
Measurements & Controls, Inc., supra; Secure Servs. Tech., Inc., 
supra.

We recommend that the agency determine whether the requirement that an 
offeror possess a Virginia Real Estate Broker License in order to 
receive award exceeded the agency's requirements; if it does, the 
agency should amend the RFP, obtain and evaluate new proposals, and 
make award in accordance with the revised RFP.  If CitiWest is not the 
successful offeror, its contract should be terminated.  Alternatively, 
if the license remains a requirement, we recommend that the agency  
reject CitiWest's proposal if CitiWest does not possess the requisite 
license (subject to Small Business Administration review under 
certificate of competency procedures, see FAR subpart 19.6) and 
terminate the contract, reevaluate the remaining competitive range 
proposals in accordance with the RFP, and make a new award selection.  
In any event, in light of the evaluation discrepancies noted, we 
recommend that a new TEP be appointed to evaluate the new proposals to 
assure equal evaluation.  See J.M. Cashman, Inc., B-233773, Apr. 14, 
1989, 89-1 CPD  para.  380.  We further recommend that Tidewater be 
reimbursed the reasonable costs of filing and pursuing its protest 
under section 21.8(d)(1) of our Bid Protest Regulations, 61 Fed. Reg. 
39043 (1996)(to be codified at 4 C.F.R.  sec.  21.8(d)(1)).  The protester 
should submit its certified claim for costs to the contracting agency 
within 60 days of receiving this decision pursuant to section 
21.8(f)(1) of our Regulations, 61 Fed. Reg. 39043 (to be codified at 4 
C.F.R.  sec.  21.8(f)(1)).

The protest is sustained.

Comptroller General
of the United States 

1. Our discussion of the respective contents and evaluation of 
CitiWest's and Tidewater's proposals is necessarily general because we 
recommend a reevaluation of the proposals and because no protective 
order was issued, inasmuch as the protester did not employ legal 
counsel.  

2. Tidewater's BAFO noted the limited size on the one-page Form 477 
for notations.

3. The agency incorrectly states in its report in response to the 
protest that CitiWest's proposal contained a Form 477 "for the 
property specifically identified in the RFP."

4. It appears that the Camden property was in need of much more 
extensive repairs than the specified Virginia Beach property, which 
permitted CitiWest to provide a more extensive description and perhaps 
receive more credit under this factor.  

5. A definitive responsibility criterion is a specific and objective 
standard established by an agency to measure an offeror's ability to 
perform the contract.  Federal Acquisition Regulation (FAR)  sec.  9-104-2.  
Such special standards put firms on notice that the class of 
prospective contractors is limited to those meeting qualitative or 
quantitative criteria deemed necessary for adequate performance, e.g., 
unusual expertise, specialized facilities, or particular licenses.  
Tucson Mobilphone, Inc., B-258408.3, June 5, 1995, 95-1 CPD  para.  267.

6. The agency now states that the requirement that the license be 
obtained prior to award overstated its minimum needs and that the 
requirement as stated was "sometimes confusing to offerors."  The 
protester notes that this requirement may well have caused nonlocal 
firms not to compete and required other offerors to undergo the 
expense of obtaining the proper license prior to award.