Government Contracts Awardee Met RFP Requirements for Joint Venture Offerors
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Friday, October 25, 2019

Awardee Met RFP Requirements for Joint Venture Offerors

By Government Contracts Editorial Staff

A joint venture was not ineligible for award, because its JV agreement complied with the terms of the request for proposals for base operations support at Naval Air Station Sigonella. A section of the RFP entitled “Italian regulation requirement joint venture agreements” required JV offerors to submit a notarized legal document that established the JV. The JV agreement was to “remain irrevocable” until one year after final inspection and acceptance of the work, and it was to include language indicating that each JV member would be “jointly and severally liable for the performance of the whole contract.” The RFP further stated the government reserved the right to review the JV agreement. According to the protester, the awardee’s proposal was materially noncompliant with the RFP and could not form the basis for award because its JV agreement failed to include a statement that “each member [of the JV] [would] be jointly and severally liable for the performance of the whole contract.”

Not Material Term. The Comptroller General agreed with the government that these were procedural requirements and not material RFP terms. Material solicitation terms “are those that affect the price, quantity, quality, or delivery of the goods or services being procured,” and “[a] proposal that takes exception to a solicitation’s material terms and conditions should be considered unacceptable and may not form the basis for an award.” Here, none of the procedural requirements for JV agreements had any bearing on the evaluation factors or the basis for award. Although the RFP specifically reserved the government’s right to review JV agreements and determine their “compliance with the applicable laws,” it did not require this review. In addition, the RFP did not advise that failure to comply with the JV requirements could be considered a basis for eliminating proposals, so the government acted reasonably in declining to disqualify the awardee based solely on the content of its JV agreement. Moreover, the government persuasively explained that it included the requirements to ascertain the legal status of the JV entity, and the awardee complied with the JV requirements that the protester specifically challenged. Finally, the protester failed to demonstrate it was competitively prejudiced by any waiver of submission requirements. (Gemmo S.p.A., 34 CGEN ¶116,544)

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