By Government Contracts Editorial Staff
A protest of a contract award for residential re-entry center and home confinement services was sustained because it was unclear whether the awardee met a solicitation requirement to provide sufficient proof of the right to use the proposed facility. The request for proposals required offerors to "provide evidence supporting the offeror’s [r]ight-[t]o-[u]se the proposed facility." Acceptable evidence of right-to-use was "limited to deeds, leases, bills of sale, options to lease, options to buy, contingency leases or contingency deeds." In concluding that the awardee met the requirement, the government found that a "letter of intent" to sign a formal lease executed by the awardee and a landlord, and a "master lease" between the landlord and a third party, was "satisfactory as valid proof of right-of-use." The government maintained that, although the document was identified as a letter of intent, it was clearly a contingency lease or option to lease because it explicitly stated that it was contingent on the awardee "winning and securing the government contract" and was signed by the awardee and the landlord.
Problematic Explanation. The Comptroller General found the government’s explanation problematic for several reasons. The RFP clearly prescribed specific types of acceptable documents demonstrating right-to-use, but a letter of intent was not one of them. Further, although the government and the awardee viewed the letter of intent as an option to lease or a contingency lease, the document itself clearly stated that it was a letter of intent, it was not the lease between the awardee and the landlord, and a lease would be negotiated or executed in the future. Finally, even if the letter of intent could be construed as either an option to lease or a contingent lease, the letter, on its face, stated that if the contract was not awarded by May 1, 2017, any agreement for a lease was null and void. The RFP clearly required the government to consider "the validity of the offeror’s right to use," including "both the legality of the instrument and the nature of the interest …," but nothing in the record showed the government contemporaneously analyzed the legality, the nature of the interest, or the continued viability of the letter of intent. The Comptroller General recommended the government document its evaluation and prepare a new source selection decision, or assess whether the RFP accurately reflected its actual needs. (Hope Village, Inc., 34 CGEN ¶116,305).
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