TITLE:  Moreland Corporation, B-291086, October 8, 2002
BNUMBER:  B-291086
DATE:  October 8, 2002
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Moreland Corporation, B-291086, October 8, 2002

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This redacted version has been approved for public release.        

   Decision
    
Matter of:    Moreland Corporation
    
File:             B-291086
    
Date:              October 8, 2002
    
Robert J. Symon, Esq., and Stasia Broadwater, Esq., Spriggs &
Hollingsworth, for the protester.
Phillipa L. Anderson, Esq., Dennis Foley, Esq., and Philip Kauffman, Esq.,
Department of Veterans Affairs, for the agency.
Linda C. Glass, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Exclusion of protester's lower-rated, lower-priced proposal for the
construction and lease of an outpatient clinic from the competitive range
was reasonable where the protester failed to address material concerns
identified by the agency in its revised proposal.
DECISION
    
Moreland Corporation protests the exclusion of its proposal from the
competitive range and award of a contract to William J. Brant & Associates
under solicitation for offers (SFO) No. V101-183R-629-006-01, issued by
the Department of Veteran's Affairs (VA) for the design, construction and
lease of an outpatient clinic in Baton Rouge, Louisiana.
    
We deny the protest.
    
The SFO, issued October 29, 2001, requested cost proposals for a 15-year
lease
with one 5-year renewal option.  SFO P: 1.4.  Delivery of space was
required by November 30, 2003.  SFO P: 1.6.  Award was to be made to the
offeror whose proposal represented the best value to the government, price
and other factors considered.  SFO, Cover Letter, Oct. 29, 2001.  The
following evaluation factors were set forth in descending order of
importance:  (1) technical quality, including the quality of the building,
the design concept and the quality of the site; (2) the adequacy and
efficiency of the proposed operations and maintenance plans;
and (3) the offeror's qualifications, including past performance.  SFO P:
2.2. 
Price evaluation was to be based on the annual price per net usable square
foot, including any option periods.  Technical factors, when combined,
were equal to price.
    
Five offerors, including Moreland and Brant, submitted fourteen different
proposals and alternate proposals.  Based on initial evaluation by the
technical evaluation board (TEB)  and a price analysis of offers, the
contracting officer included all proposals in the competitive range.  Oral
discussions were conducted with each competitive range offeror.  On
February 28, 2001, during oral discussions, among other things, Moreland
was advised that the funds proposed for the required lessor funded account
for maintenance, capital repair and replacement were insufficient based on
the government's cost estimates to maintain and/or replace building
systems in a building this size.  Moreland was further advised that funds
specified in its cost proposal for operating expenses were insufficient to
maintain a building of this size.  The agency also discussed the adequacy
and efficiency of Moreland's operation and maintenance plan.  For example,
the agency asked Moreland how it would manage the property and whether
Moreland, located in California, proposed  to have a local firm in the
Baton Rouge area designated as the property manager or whether the firm
would act as the property manager.  Moreland advised the agency that local
service contractors would be hired to perform maintenance as required by
the SFO, but that it would manage the property through its main office in
California, and, when the main office was closed, an answering service
would be used.  Subsequent to the February 28 oral discussions, on March
6, the agency sent Moreland an e-mail advising of the agency's concerns
with respect to Moreland's low annual cost for operating expenses and its
low maintenance account.   Additionally, the agency requested:
    
[E]xplain in detail how you will maintain the facility per [the SFO
requirements], especially the items to be done twice a             week,
if you do not have a local, designated maintenance person.  Explain if you
will have local contracts in place to perform maintenance and repair work
and the process
the clinic will have to go through in order to get service.  Explain how
phone calls to your office 3 thousand miles away with a 3-hour time
difference will allow one hour response times for emergencies 24 hours a
day, 7 days
a week.  Will local contracts be in place at the time of occupancy and
will the clinic be given the names and phone numbers of the local
contractors to call directly.  We would want the flexibility to do this in
emergencies, and cannot see how it can be accomplished with the present
property management plan.
    
Exh. 38, e-mail to Steve Moreland, March 6, 2002. 
    
Final proposal revisions were requested on March 7, 2002, and proposal
revisions were received on March 25.  Moreland's revised offer increased
the funds in the maintenance account.  However, Moreland did not address
the agency's specific concerns regarding Moreland's operations and
maintenance plan.  Moreland also did not address the agency's concern that
its projected operating expenses were too low.  Since Moreland had failed
to address these concerns, among others, its proposal was eliminated from
the revised competitive range.  By letter dated July 16, 2002, Moreland
was notified of its elimination from the competitive range.  The remaining
competitive range offerors were requested to extend their offers until 
August 15, 2002 and were requested to provide additional information. 
Agency Report, exh. 61, Request for Bid Extension and Additional
Information.  On July 22, after review of the additional information, the
contracting officer determined that Brant's offer represented the best
value to the government.  A lease was subsequently awarded to Brant. 
After receiving a pre-award debriefing, Moreland filed this protest with
our Office on August 7.
    
Moreland essentially argues that the agency failed to properly evaluate
its revised proposal and that therefore the elimination of the proposal
from the competitive range was unreasonable.  Moreland argues that all the
VA's concerns were addressed in Moreland's original proposal and during
discussions.
    
If the agency's evaluation of proposals is reasonable, in accordance with
the solicitation criteria, and does not violate law or regulation, there
is nothing improper in the agency's making more than one competitive range
determination and removing  a firm from further consideration. 
Labat-Anderson Inc., B-246071.4, Oct. 9, 1992, 92-2 CPD P: 244 at 6. 
    
As quoted above, the protester was specifically advised during written
negotiations to address its low operating expenses and to specifically
explain in detail how it would maintain the facility.  The record further
shows that the protester did not address the agency's concerns in writing
in its revised proposal.  Based on the agency's detailed e-mail request,
it should have been reasonably clear to Moreland that the oral discussions
had not resolved the agency's concerns.  The record shows that not until
the protester filed its comments to the agency report for this protest did
it furnish any detailed written explanation of its operation and
maintenance plan and the reasonableness of its operating expenses.  Since
agencies are required to evaluate proposals based on the content of the
proposal itself, an offeror in a negotiated procurement must demonstrate
its capabilities within the four corners of its proposal.  Northwestern
Travel Agency, Inc., B-244592, Oct. 23, 1991, 91-2 CPD
P: 363 at 6.  Since the protester's proposal failed to address the
adequacy of its operations and maintenance plan as required by the SFO or
to establish the reasonableness of its operating expenses, the agency
reasonably eliminated the proposal from the competitive range.[1]
    
With respect to Moreland's challenge to the agency's decision to conduct
further discussions with competitive range offerors and to the agency's
source selection decision, since we conclude that Moreland was properly
excluded from the revised competitive range, Moreland is not an interested
party to raise these issues. 
4 C.F.R. S: 21.0(a) (2002); A Travel Passport, Inc.; Global Express Travel
Servs., Inc., B-255383.2 et al., 94-1 CPD P: 171 at 7.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

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   [1] The protester alleges unequal competition because Brant like the
protester indicated in its original proposal that it would hire local
contractors to perform the maintenance and repair work and that it would
manage the property from non-local home offices.  However, the record
shows that Brant in its final proposal revision indicated that after award
it would hire a local property manager to manage the maintenance and
repair work.