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