BNUMBER: B-276911
DATE: July 2, 1997
TITLE: Working Alternatives, Inc., B-276911, July 2, 1997
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Matter of:Working Alternatives, Inc.
File: B-276911
Date:July 2, 1997
Barry Rubin and Donald W. Gormly, Jr., Esq., for the protester.
Joseph Summerill, Esq., Department of Justice, for the agency.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Contracting agency properly concluded that protester's proposal
was technically unacceptable where the documentation submitted to
comply with a mandatory requirement to show the firm's right to use
the facility it proposed is insufficient on its face in that it sets
out terms dictated by the prospective lessor with no indication that
the protester/prospective lessee has agreed to the terms and fails to
specify a definite duration of the lease.
2. There is no basis to object to agency decision not to communicate
with offeror regarding deficiencies in its documentation submitted to
show compliance with a mandatory right to use requirement regarding
proposed facility, since any such communication would have constituted
discussions, not clarifications, and the solicitation clearly notified
offerors of the agency's intention to make award without discussions.
DECISION
Working Alternatives, Inc. (WAI) protests as improper the rejection of
its proposal under request for proposals (RFP) No. 200-374-W, issued
by the Department of Justice, Federal Bureau of Prisons, to obtain
residential community corrections center services in the Los Angeles,
California area.
We deny the protest.
The solicitation advised that award would be made to the offeror whose
offer, conforming to the solicitation, was most advantageous to the
government, considering price and various technical factors not at
issue here. In addition, proposals would be evaluated to determine
whether the offeror complied with several mandatory technical
requirements. One of these mandatory requirements concerned the
offeror's right to use its proposed facility:
L.7(a) . . .
ALL TECHNICAL PROPOSALS MUST CONTAIN DOCUMENTATION
REGARDING RIGHT TO USE, . . . .
(g)All proposals must provide evidence supporting the
offeror's right to use the proposed facility. Acceptable
evidence of right to use is limited to deeds, leases,
bills of sale, options to lease, options to buy,
contingency leases or contingency deeds. Please note
that the Bureau of Prisons may award a contract based on
the initial submittal of offers, therefore, offerors must
consider each proposal as a best and final offer unless
otherwise instructed by the Contracting Officer.
Confirming the instruction contained in this final sentence, the
solicitation included Federal Acquisition Regulation (FAR) sec.
52.215-16, Alternate II, which advised offerors of the agency's intent
to award the contract on the basis of initial proposals without
conducting discussions, save for communications conducted for the
purpose of minor clarification.
Proposals were submitted on April 1, 1997. The contracting officer
reviewed WAI's proposal and determined that the document submitted in
connection with the right to use requirement--an agreement to
lease--was insufficient to show that the firm complied with this
mandatory requirement. As a result, the contracting officer
determined that WAI's proposal was technically unacceptable. In its
protest, WAI argues that its agreement to lease was sufficient to meet
the mandatory right to use requirement or, alternatively, that the
agency should have communicated with the firm to clarify the matter.
The evaluation of proposals and the resulting determination of whether
a proposal is within the competitive range is a matter within the
discretion of the contracting agency, since the agency is responsible
for defining its needs and the best method of accommodating them.
Bannum, Inc., B-271075 et al., May 22, 1996, 96-1 CPD para. 248 at 3. Our
Office will only question the agency's evaluation where it lacks a
reasonable basis or conflicts with the stated evaluation criteria for
award. Id.
The document in question is a letter to WAI's president from the
prospective lessor entitled, "Agreement to Lease 101 W. 89th St., Los
Angeles, CA." The letter states:
"This letter shall serve as a record of my agreement to enter
into a lease for the above-mentioned property to Working
Alternatives, Inc. for the purpose of operating federal
corrections programs. The terms of the lease will be as follows:
1.The lease term shall be for five years, with an option to
extend the lease for an additional five years.
2.The rental amount shall be based on the contracts that are
serviced in the facility, with a rental of $18,000 per month
per 50 bed contract.
3.The rent shall increase by 5% per year at the beginning of
each contract year.
4.Tenant (Working Alternatives, Inc.) shall be responsible for
all taxes, insurance, repairs and maintenance for the
property.
5.All operations must be in compliance with the Conditional
Use Permit.
6.All other terms of the lease shall be commercially
reasonable and acceptable to both parties.
"Additionally, I have asked my attorneys to draft a lease
formalizing these terms. The draft should be prepared within 30
days. A copy will be forwarded to you as soon as possible. . .
."
The agency contends that this letter does not conform with the strict
terms of evidence required by section L.7(g) because it leaves several
terms to be agreed upon when the lease is drafted. We agree.
To create a valid lease in California, certain points of mutual
agreement are necessary. There must be a definite agreement as to the
extent and boundary of the property to be leased, a definite and
agreed term, a definite and agreed price of rental, and the time and
manner of payment. Levin v. Saroff, 201 P. 961, 963 (Cal. 1921). The
letter submitted by WAI is by its terms an agreement by the
prospective lessor to enter into a lease in the future. It consists
of the terms dictated by the prospective lessor, but gives no
indication that WAI, the prospective lessee, agreed to these terms.
In addition, while the letter includes a 5-year term, the absence of
anything more definite, such as a commencement date or reference to a
contract award date, leaves open the question whether the facility
will be available when required under this contract. Id.; see also
Bannum, Inc., B-248169.2, Sept. 29, 1992, 92-2 CPD para. 216 at 5
(offerors did not satisfy strict terms of the evidence requirement
under an identical provision where, among other things, neither
offeror's letter of intent to lease included material terms and
conditions for a lease pertinent to the contract period). WAI's
argument that this letter represents a contingency lease--with the
contingency being award of the contract--does not in any way address
the material failings of the document, and further overlooks the fact
that the letter makes no reference at all to this solicitation or the
anticipated contract. Further, the letter does not purport to be nor
can it be construed as a deed, bill of sale or option to lease or buy.
Accordingly, we conclude that the agency properly determined that the
firm's proposal failed to show that it complied with the mandatory
right to use requirement.
An offeror must affirmatively demonstrate by the terms of its proposal
that its offered product or services meets all of a solicitation's
material requirements. Gordon R.A. Fishman, B-257634.3, Nov. 9, 1995,
95-2 CPD para. 217 at 2. An agency may not properly accept for award a
proposal that fails to meet one or more material solicitation
requirements. Id. Since the agency properly determined that WAI's
proposal did not meet a material solicitation requirement, its actions
here were unobjectionable.
WAI alternatively argues that the agency should have requested
clarification from the firm regarding its right to use the proposed
facility. The protester points out that FAR sec. 52.215-16, Alternate
II, allows for the possibility of communications conducted for the
purpose of minor clarification in a procurement where the government
intends to award a contract without discussions.
Clarifications are communications with an offeror for the sole purpose
of eliminating minor irregularities, informalities, or apparent
clerical mistakes in the proposal. FAR sec. 15.601 (FAC 90-45). The
evidentiary inadequacies of WAI's agreement to lease cannot be
construed as any of these. Instead, the record shows that the
document was insufficient on its face and rendered the proposal
technically unacceptable for failure to meet the mandatory right to
use requirement. As a result, any communications between the agency
and WAI to supplement the document would have constituted
discussions--communications that involve information essential for
determining a proposal's acceptability or that provide an offeror the
opportunity to revise or modify its proposal. Id. Since the
solicitation clearly notified offerors of both the agency's intention
to award a contract without discussions and the mandatory nature of
the right to use requirement, the agency was under no obligation to
hold discussions with WAI. See Gulf Copper Ship Repair, Inc.,
B-272830, Sept. 25, 1996, 96-2 CPD para. 124 at 3.
The protest is denied.
Comptroller General
of the United States