The Alaska Department of Environmental Conservation [DEC] issued a request for proposals to provide a technical review of tank and piping corrosion monitoring and control technologies. Corrpro and several others submitted proposals. After proposals were submitted, DEC engaged in negotiations with the highest rated respondent, CC Technologies. The negotiations were successful, and DEC issued a notice of intent to award the contract to CC Technologies.

Corrpro filed a protest, which DEC denied. On appeal, Corrpro claimed: (1) DEC negotiated with CC Technologies contrary to the terms of the RFP; (2) the work requested in the RFP must be performed by an engineer registered under AS 08.48; (3) the specifications in the RFP dealing with the scope of the work were ambiguous; and (4) the RFP should have provided a preference or additional points on evaluation for Alaska hire.

The commissioner made an initial determination that the latter three points had not been raised in a timely manner, and should be dismissed on that ground. A hearing officer was appointed with respect to the remaining issue. At a prehearing conference, Corrpro asserted that the question whether an engineer must be registered under AS 08.48 had been raised in a timely manner. Corrpro argued that because the RFP required that all respondents possess the appropriate licenses and Corrpro believed that registration under AS 08.48 was required, it did not protest the contents of the solicitation, and that it had protested as soon as it became aware of the fact that DEC did not deem such registration necessary. DEC agreed that in light of this reasoning there was good cause for any delay in filing a protest on that issue. Accordingly, I recommend that the commissioner consider the merits of this issue in addition to the issue regarding negotiations with CC Technologies. AS 36.30.565(b).

A.

Negotiations with CC Technologies.

Alaska law places substantial restrictions on the discussions that a contracting agency may have with some or all respondents before conducting a final evaluation of proposals. See generally, AS 36.30.240; 2 AAC 12.285-.295. However, those restrictions do not apply to negotiations with the respondent selected as the intended contractor that are initiated after the evaluation has been completed. An agency may issue a notice of intent to award a contract as soon as the final evaluation has been completed and the proposed contractor has been identified, or it may defer issuance of the notice of intent until after negotiations have been completed; Alaska law requires only that the notice be issued before the contract is actually awarded. AS 36.30.365; 2 AAC 12.310; 2 AAC 12.210.

In this case, the undisputed evidence establishes that DEC did not engage in any improper discussions prior to completing its evaluation of the proposals. Rather, DEC completed its evaluation, identified the highest ranked respondent and then immediately entered into negotiations with that respondent, without first issuing a notice of intent to award the contract to that respondent. This procedure was not contrary to law.

Corrpro contends that DEC did not comply with the terms of the solicitation. However, even if Corrpro correctly interprets the RFP as providing for issuance of a Notice of Intent prior to negotiations, [1] cancellation of the solicitation is not necessary. Particular terms in a solicitation may be binding on the agency by law. [2] Other terms may be binding because to disregard them would be contrary to the agency's obligation to conduct the solicitation and consider all responses fairly, in good faith, and in conformity with Alaska law. See generally, McBirney & Associates v. State, 753 P.2d 1132 (Alaska 1988). But even when an agency has a contractual obligation to abide by the terms of a solicitation, only a material breach of the contract is grounds for canceling the solicitation.

In this case, Corrpro has not shown that DEC's decision to enter into negotiations with the highest rated respondent before issuing a Notice of Intent was unfair, in bad faith, contrary to law, or prejudicial to Corrpro, or that the timing of the issuance of the Notice of Intent was a material element of the RFP.

Corrpro's appeal states that because of ambiguities in the solicitation, it anticipated that DEC would enter into further discussions before awarding a contract. This was a reasonable belief, but it was based on perceived ambiguities in the substantive terms of the RFP, not on the language of Section 2.20. Thus, Corrpro's expectation that DEC would consult further before awarding a contract did not preclude the possibility that DEC would evaluate the proposals as submitted and then proceed directly to negotiations with the highest ranked respondent. In short, while Corrpro may have reasonably anticipated a further discussion, it was not entitled to one. Furthermore, the lack of an opportunity for such a discussion prior to evaluation affected all of the respondents equally. DEC's decision to proceed directly to final evaluation of the proposals, followed by negotiations with the highest ranked respondent, was not "unfair" within the meaning of McBirney, because it gave no competitive advantage to CC Technologies.

In any event, Corrpro's argument is not that it was entitled to engage in discussions with DEC before the evaluation process was completed, but that it was entitled to a Notice of Intent before negotiations occurred. But this argument is not persuasive, either. If a Notice of Intent had been issued before negotiations were conducted, the outcome of the solicitation would not have been affected. Negotiations with CC Technologies would simply have occurred after issuance of the notice, rather than before. The timing of the Notice of Intent was not a material term of the solicitation.

For the foregoing reasons, I recommend that the commissioner deny the appeal on this issue.

B.

Registration Under AS 08.48.

The sole issue in this regard that was raised by Corrpro and that will be considered on appeal is whether the contract may be awarded to a party that is not registered under AS 08.48. Any other issues arising out of an impropriety in the solicitation were not raised in a timely manner and have been waived. AS 36.30.565.

DEC asserts that the work which was the subject of this RFP could be performed by a firm that is not registered under AS 08.48, because the work entailed only a technical review of existing technologies, rather than any actual design work or any "engineering evaluations of specific designs." Corrpro argues that the work required in the RFP is "conceptual engineering", which it asserts is "by definition engineering work."

Whether the work constitutes the practice of engineering as defined in AS 08.48.341(9), and whether CC Technologies has complied with AS 08.49.241, [3] are issues solely within the jurisdiction of the Division of Occupational Licensing and the Board of Architects, Engineers, and Land Surveyors. The Department of Administration has no role in the enforcement of AS 08.48. [4]

But the Department of Administration does have an obligation to observe and enforce those provisions of law that expressly limit the contracting authority of an agency. AS 36.90.100 expressly prohibits the award of a contract for "engineering services" to a person who is not registered under AS 08.48. Plainly, it is the obligation of the Department of Administration, through oversight of the procurement process, to ensure that contracting agencies comply with AS 36.90.100. An award made in violation of AS 36.90.100 would constitute an impropriety in an award of a contract, within the permissible scope of a protest filed under AS 36.30.560.

In response to an inquiry from the hearing officer, the Board of Architects, Engineers and Land Surveyors reviewed the RFP and adopted a resolution deeming the work to constitute engineering. This is a reasonable interpretation of AS 08.48.341(9) as applied to the RFP. [5] I conclude that the contract may not be awarded to a firm that is not registered under AS 08.48. However, because DEC did not immediately award the contract, it is possible that CC Technologies could obtain registration in a timely manner. [6] In view of the fact that Corrpro did not raise this issue until after the due date for proposals and after the selection of the proposed contractor, it would not be appropriate to cancel the solicitation based on CC Technologies' status at the time proposals were submitted. I therefore recommend that the commissioner continue to stay the award of the contract pending submission by CC Technologies of evidence that it is registered under AS 08.48. DEC retains discretion to cancel the solicitation if a contract cannot be executed in time to provide for completion of the work in a timely manner or if cancellation is otherwise deemed in the state's best interest.

DATED this 16th day of March, 1999.