TITLE:  Marshall-Putnam Soil and  Water Conservation District, , May 29, 2002
BNUMBER:  B-289949
DATE:  May 29, 2002
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Decision

Matter of:      Marshall-Putnam Soil and Water Conservation District

File:                B-289949; B-289949.2

Date:              May 29, 2002

Jill Ketter for the protester.
Alan D. Groesbeck, Esq., Department of Agriculture, for the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Under solicitation for offers for leased office space, proposal that failed
to conform to material solicitation requirements for architectural elevation
and landscape plans could not form the basis for award.
DECISION

The Marshall-Putnam (MP) Soil and Water Conservation District protests the
award of a lease to Henry Developers, Inc. under a solicitation for offers
(SFO) issued by the Farm Service Agency (FSA), United States Department of
Agriculture (USDA), for 3,600 square feet of office space.  The office space
is to serve as the new USDA Service Center in Henry, Illinois, and will
serve Marshall and Putnam counties.  The protester primarily maintains that
USDA should have rejected Henry's proposal as technically unacceptable.

We sustain the protest.

BACKGROUND

FSA issued this SFO on December 12, 2001, contemplating an initial 5-year
lease at a fixed annual price, with one 5-year option period.  SFO para. 1.3, at
5.  The SFO sought offers for approximately 3,600 square feet of office
space in a new or existing
building in Henry, Illinois.[1]  At the same time that FSA issued the SFO,
it provided offerors with what appears to be a rough floor plan indicating
the agency's ?preferred? layout of the required space.  The SFO listed the
following technical evaluation factors in descending order of importance:
accessibility/location; quality/physical characteristics; layout
compatibility; parking; safety; first floor space; fixed rate, fully
serviced lease; proximity of eating facilities; energy conservation; and
price.  The SFO provided instructions on the type of information and
architectural details offerors were required to include with their offers.
As for price, offerors were instructed to submit an annual rental rate per
square foot for the initial 5?year term of the lease, and for the option
period.  Technical factors and price were of equal importance.  Award was to
be made to the offeror whose proposal earned the highest combined score of
both price and technical factors.

Four firms, including the protester and the awardee, responded to the SFO by
the January 11, 2002 closing date.  The acting County Executive Director
(CED), who was responsible for conducting this acquisition, excluded one
offer from further consideration, leaving the protester's, Henry's and a
third offeror's proposals in the competition.  Both Henry and MP offered new
construction.  The third offeror proposed space in what the record refers to
as a ?historical? building.  Upon his initial review of offers, the CED
noted that with its offer, Henry attached a copy of the rough layout that
FSA had provided, but did not provide any architectural drawings, elevations
or other details about the offered building.  Before proceeding to evaluate
offers, the CED sought advice from the FSA State Administrative Officer (AO)
regarding the sufficiency of Henry's plan.  According to the CED, the AO
advised him that the rough floor plan Henry attached to its offer would meet
the government's needs.

The CED and an NRCS representative evaluated technical offers by assigning
numerical ratings under each factor and a total score, for a maximum of 50
points in the technical area.  Price was evaluated by assigning the maximum
possible score (50 points) to the lowest price, and proportionately lower
scores to higher prices.  The table below shows the results of the technical
and price evaluation for the proposals submitted by the protester and the
awardee (prices reflect upward adjustments FSA made to reflect certain
required services):

Offeror     Price/       Price   Tech.   Total
            Sq. Ft.      Score   Score   Score

Henry       $13.55       50      46      96

MP            14.04      48      46      94

AR exh. L, Cost and Technical Analysis.

In a letter dated January 29, FSA notified the protester that it had
selected another firm for the lease.  This protest followed.

MP primarily contends that FSA should have rejected Henry's offer as
technically unacceptable because that firm did not include with its offer
elevation or landscape plans allegedly required by the SFO.[2]

Timeliness

USDA requests that we dismiss the protest as untimely.  The agency argues
that MP learned that Henry had not included elevation plans with its offer
on February 4, 2002.  Relying on 4 C.F.R. sect. 21.2(a)(2) (2002), USDA
maintains that since MP did not file its protest with our Office until
February 19, more than 10 days later, the protest is untimely. USDA also
argues that MP unduly delayed seeking further details about the award to
Henry.  We disagree on both counts.

MP explains that it received FSA's award notification letter on February 1.
On February 4, MP telephoned a contractor that assisted MP in preparing its
offer, to inform the contractor that MP had not been selected.  According to
the protester, MP learned during that conversation that Henry had contacted
the contractor to inquire whether that firm would be interested in
constructing the new building Henry proposed, and to request that it prepare
the building plans.  In response, the contractor apparently suggested that
Henry contact the protester to ask whether MP would be willing to sell
existing plans that it had already prepared for MP in connection with the
SFO.  By letter on that same day, MP asked FSA to provide more specific
information concerning the award including the award date, rental rate, the
identity of the firm selected, location of the proposed building, and a copy
of the floor and landscape plans the awardee submitted with its offer.  By
letter dated February 11, FSA responded to that request by providing MP with
a copy of Henry's complete proposal.  MP subsequently filed the instant
protest on February 19.

While the information MP learned during the conversation with the contractor
may have led MP to deduce that FSA had selected Henry, and that the firm's
offer probably did not include architectural or elevation plans, that
suspicion alone was not adequate to trigger the running of the 10-day period
for filing a protest.  Even assuming that MP correctly assumed that FSA had
awarded Henry the lease, MP could not have discerned from the conversation
with the contractor what information Henry had included with its offer, the
form of that information, or the level of detail describing the proposed new
building for the agency to evaluate (e.g., architectural drawings, sketches,
schematic plans, landscape, or elevation plans).  It was not until after MP
received FSA's February 11 response to its request for additional
information that the protester confirmed that FSA had selected Henry, and
that Henry's offer did not include elevation or landscape plans.

Moreover, contrary to FSA's suggestion, this is not a case where the
protester unreasonably delayed requesting additional information.  See,
e.g., Pentec Envtl., Inc., B-276874.2, June 2, 1997, 97-1 CPD para. 199 (protest
dismissed where protester delayed debriefing for more than 1 month so that
it could first obtain and evaluate information received under the Freedom of
Information Act and so that its president could attend an unrelated business
conference and take a vacation); Professional Rehab. Consultants, Inc.,
B-275871, Feb. 28, 1997, 97-1 CPD para. 94 (protest dismissed as untimely where
protester failed to request debriefing until 2 months after it was informed
that it had not received award).  Rather, within 3 days of learning that FSA
had selected another firm, MP asked FSA to provide details concerning the
award.  In our view, MP acted diligently in seeking information that formed
the basis for its protest.  Accordingly, MP's protest, filed on February 19,
within 10 days after MP received FSA's reply to its request for information
regarding the award, is timely.  4 C.F.R. sect. 21.2(a)(2).

Analysis

MP contends that FSA should have rejected Henry's offer as noncompliant with
material SFO requirements for elevation and landscape plans.

As a preliminary matter, we note that throughout the record, the agency uses
the terms ?bid? and ?nonresponsiveness? to refer to the offers.  Similarly,
the protester alleges that the agency should have rejected the awardee's
?bid? as ?nonresponsive.?  The agency concedes, however, that the SFO is
essentially a request for proposals.  Agency Memorandum of Law at 3.  The
record also shows that the agency contemplated treating offers as in a
negotiated procurement--e.g., the SFO provided for detailed evaluations, and
contemplated negotiations prior to award.  See SFO sect. 1.0, para.para. C-J, and sect. 2.0,
para.para. 2.1, 2.2, and 2.3.  The references to ?bids? and ?nonresponsiveness? are,
therefore, inappropriate, since these concepts are not applicable to
negotiated procurements.  See Merrick Eng'g, Inc., B?238706.3, Aug. 16,
1990, 90-2 CPD para. 130 at 2 n. 2.  We interpret MP's protest as contending
that Henry's proposal should have been rejected as technically unacceptable
because the firm's offer allegedly did not comply with the SFO
requirements.  Accordingly, we analyze the protester's contentions by the
standards applicable to negotiated procurements.[3]

In a negotiated procurement, a proposal that fails to conform to the
material terms and conditions of the solicitation should be considered
technically unacceptable and may not form the basis for an award.  See 41
U.S.C. sect. 253b(a) (1994); Rel-Tek Sys. & Design, Inc., B-280463.3, Nov. 25,
1998, 99-1 CPD para. 2 at 3; Eigen, B-249860, Dec. 21, 1992, 92-2 CPD para. 426 at
4.   As relevant here, the SFO contained specific instructions on the type
and level of detail of information offerors were required to submit with
their proposals.

As explained in greater detail below, we conclude that Henry's proposal
failed to satisfy the SFO's material requirements.

The SFO contained the following provision:

Required attachment to all offers:
A.     One copy of a schematic floor plan, preferably drawn to a scale of
1/8 or 1/4 inch to the foot, indicating the space offered and showing the
location of all existing windows, structural features, and mechanical
equipment.  Alterations or other work planned for the purpose of meeting
solicitation specification must be clearly shown on the plans and/or
explained in an attached narrative statement.

B.     When new construction is proposed, one copy of a plan drawn to scale
and an elevation drawing(s), showing all existing or proposed improvements
and landscaping.
AR, exh. G, SFO para. 1.7, at 5.

Consistent with those instructions, the SFO required offerors to submit the
following with their proposals:

4  complete sets of one-eighth inch (preferred) or larger scale plans that
clearly illustrate the space being offered.  All architectural features of
the space must be accurately shown in the form of elevations and wall
sections which define the relationships of all required spaces and
construction systems and finish materials.  IF CONVERSION OR RENOVATION OF
THE BUILDING IS PLANNED, ALTERATIONS TO MEET THIS SOLICITATION MUST BE
INDICATED.  If requested, more informative plans, specifications, or other
information must be provided within 5 working days.  Site plan showing
placement of building on site, proposed parking required, and landscape plan
is required.
Id. para. A(3) at 6.

There is no question that if an offeror proposed new construction, the SFO
required as an attachment to the offer an architectural plan drawn to scale,
including elevation drawings.  There is also no question that the SFO
required that those architectural plans clearly illustrate the space being
offered, and that ?all architectural features of the space must be
accurately shown in the form of elevations and wall sections which define
the relationships of all required spaces and construction systems and finish
materials.?  SFO para. A(3) at 6.  As the agency recognizes, ?[t]he purpose of
submitting the drawings in the case of new space is to ensure compliance
with the Government's requirements.?  AR exh. A, Memorandum of Law, at 11.
Clearly, without these required drawings, the agency simply could not have
known any details of the space it was leasing, the building construction and
design, or materials to be used.

Further, absent detailed architectural plans, drawn to scale, there was no
basis for evaluators to assess several aspects of a proposed new building.
For instance, as relevant to our analysis here, the evaluation factors
included an assessment of the proposed building's ?Quality/Physical
Characteristics.?  Under that area, evaluators were to assess the
suitability of the proposed space considering the quality of the building
design, among other characteristics.  Another factor assessed layout
compatibility (i.e., whether the proposed space would provide a quality
layout for furniture, equipment, and employees).  Similarly, the proposed
building was to be evaluated for safety characteristics, particularly the
structural safety of the proposed building.[4]  We fail to see, and the
agency does not explain, how these material characteristics of a building
that did not exist at the time of the evaluation--worth 50 percent of the
technical evaluation--could reasonably be evaluated without the type and
level of detailed information that elevation plans are intended to provide.
In our view, the SFO requirement that offerors submit with their proposals
elevation and landscape plans, drawn to scale, clearly relates to elements
of the offered building that are material to the needs of the government.

The agency does not dispute, and the record shows, that Henry failed to
provide the required elevation and landscape plans.  Instead, Henry attached
to its offer one copy of the rough floor plan FSA had provided with the SFO,
showing the agency's ?preferred? layout of the required space.  That rough
sketch, however, is not drawn to scale, does not show elevations, and does
not include landscape plans, as the SFO required.

The record also shows that during FSA's initial review to determine
completeness and acceptability of offers, and again during the evaluation,
FSA questioned whether Henry's proposal satisfied the SFO's requirements for
floor plans and elevation drawings.  AR exh. C, Acting CED Statement, Mar.
25, 2002, at 1-2.  The evaluators apparently determined that any failure of
Henry's proposal to satisfy the SFO's requirements in this regard could be
treated as a ?minor? informational deficiency that could be corrected after
the lease was awarded.  Id. at 2.  While the SFO did provide that ?[i]f
requested, more informative plans, specifications, or other information must
be provided within 5 working days,? the fact that the awardee may, after
award, agree to be bound to a solicitation's material requirements does not
render the proposal acceptable or the award proper.  Universal Yacht Servs.,
Inc., B?287071, B-287071.2, Apr. 4, 2001, 2001 CPD para. 74 at 5 n.7; Tri-State
Gov't Servs., Inc., B-277315.2, Oct. 15, 1997, 97-2 CPD para. 143 at 4.  In sum,
since Henry's proposal did not satisfy the SFO's material requirements for
elevation and landscape plans, the agency's acceptance of the firm's
proposal was improper.

USDA argues that MP was not prejudiced by any errors here because, even if
discussions are held, and revised proposals are received and reviewed, the
award decision will not change.  The premise of USDA's argument is that
Henry will provide the details missing from its proposal and that its
technical score will not change.  The agency's argument ignores the
fundamental problem with the evaluation here:  the agency improperly made
assumptions about the building that Henry proposed-and concluded that it not
only satisfied the government's needs, but warranted a nearly perfect
technical score-with no evidence before it of the actual features of the
building being proposed.  Since the additional information Henry may submit
with a revised proposal is unknown at this point, there simply is no basis
to conclude that the technical evaluation scores will remain the same after
submission and evaluation of revised proposals.  USDA also maintains that
opening discussions at this point to cure errors in the procurement would
essentially create an improper auction because prices have been revealed.
We view the risk of an auction as secondary to the importance of correcting
an improper award and preserving the integrity of the competitive
procurement system through appropriate corrective action.  Spectrofuge Corp.
of North Carolina, Inc.--Recon., B-281030.3, Apr. 9, 1999, 99-1 CPD para. 65 at
2-3.

Finally, regarding the price evaluation, FSA has essentially conceded that
it did not use the most current information available to adjust offerors'
prices.  In this connection, USDA has presented two explanations of how FSA
calculated price adjustments, and offered a third calculation during a
telephone conference that our Office conducted with the parties.  While MP's
rate remains higher than Henry's under any version of these calculations, it
appears that the difference between Henry's and MP's rates becomes smaller
with each subsequent calculation.  Despite our repeated requests for the
agency to provide documentation supporting its revised calculations, the
agency has failed to do so.

In order to address the issues of Henry's nonconforming proposal and the
appropriate price adjustments, we recommend that the agency hold
discussions, request revised proposals from Henry and MP,[5] reevaluate
those proposals, and document the evaluations.[6]  Regarding price
adjustments, we recommend that the agency use the most current data
available to determine appropriate price adjustments, if necessary.  We
further recommend that the agency make a new source selection decision based
on the results of the technical and price evaluations,
and terminate the awarded lease if Henry is not selected for award.  We also
recommend that MP be reimbursed the reasonable costs of filing and pursuing
its

protest.  4 C.F.R. sect. 21.8(d)(1).  MP's certified claim for costs, detailing
the time spent and the costs incurred, must be submitted to the agency
within 60 days after receiving this decision.

The protest is sustained.

Anthony H. Gamboa
General Counsel

-------------------------

[1] FSA conducted this acquisition on behalf of itself and another USDA
agency, the Natural Resources and Conservation Service (NRCS).  The agency
explains that NRCS offices often share space with the local Soil and Water
Conservation Districts.  Since 1937, various states, territories and Native
American tribal governments have enacted legislation creating local
conservation districts.  There are approximately 3,000 local districts
nationwide responsible for developing soil and water conservation programs,
and for assisting land owners and operators plan and maintain sound
conservation programs.  Each district is considered a unit of county
government, not part of USDA, and operates independently pursuant to state
law, using local and state funding.  See Agency Report (AR) exh. I, USDA
Departmental Regulation No. 1340-1, July 7, 1983.  In this case, the
protester, MP, is the local district.

[2] Alternatively, MP argues that it was unreasonable for FSA to award
nearly the maximum number of technical points to the awardee's offer, while
awarding identical high scores under all technical evaluation factors to
MP's proposal.  Since we sustain the protest and recommend that FSA
reevaluate revised offers, we need not address this contention.
[3] FSA maintains the Federal Acquisition Regulation does not apply to the
procurement here because FSA is conducting it pursuant to the independent
leasing authority of the Commodity Credit Corporation (CCC).  See 15 U.S.C.
sect. 714b (2000).  (FSA is the agency within USDA charged with carrying out CCC
programs.  Agency Memorandum of Law at 1; USDA Memorandum, July 8, 1986, at
3.)  Nevertheless, FSA concedes that the procurement is subject to the
Competition in Contracting Act of 1984.  Supplemental Agency Report, Apr. 4,
2002, at 3.
[4] In fact, the record shows that the evaluators considered this to be an
important feature of the proposed building, and downgraded the third
offeror's proposal primarily due to concerns with the proposed building's
structural safety.  AR exh. C, Acting CED Statement, Mar. 25, 2002, at 2.
[5] We recognize that in response to the protest, one evaluator expressed
concern that MP's floor plan deviated from FSA's ?preferred? layout.
However, the evaluation record does not contain any narrative explanation of
the evaluators' concerns, and there is nothing in the record to indicate how
MP's floor plan deviated from the agency's preferred layout.  In the absence
of such contemporaneous evaluation documentation, we cannot determine
whether those concerns are reasonably based.  Nevertheless, implementation
of our recommendation will allow the agency and MP to address such concerns
with MP's proposed building.

[6] For our Office to perform a meaningful review of an agency's selection
determination, the agency is required to have adequate documentation to
support its evaluation of proposals and its selection decision.  OSI
Collection Servs., Inc., B?286597, B-286597.2, Jan. 17, 2001, 2001 CPD para. 18
at 8, 12; Biospherics, Inc., B?278508.4, et al., Oct. 6, 1998, 98-2  CPD
para. 96 at 4.  Here, we note that except for assigning numerical scores to the
proposals under each of the evaluation factors, the record is devoid of any
contemporaneous documentation supporting or explaining the evaluations.