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.