Link: GAO Opinion
Agency: Department of Health and Human Services
Disposition: Protest denied.
General Counsel P.C. Highlight:
GAO denied the protest of Noridian Administrative Services, LLC (NAS), regarding the award of a contract to National Government Services, Inc., under a request for proposals (RFP), issued by the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), to obtain Medicare administrative contractor services.
CMS published a solicitation to perform a cost-plus-award-fee contract as the Medicare Administrative Contractor (MAC) in a geographic area for a one-year base period and four one-year option periods. After protests were filed, the agency cancelled the award, amended the solicitation, and sought new proposals. In the amended solicitation, there were only two factors being considered: offeror capability and cost/price. Cost/price proposals would be evaluated for realism. NAS’s proposal and responses to agency questions led to the agency to conclude that, because the proposed innovations had been implemented prior to the period that NAS used as a basis for its proposed cost/price savings, NAS would not realistically experience additional savings over and above its historical costs.
NAS protests that the agency’s cost realism adjustment with regard to its proposed costs savings was improper. GAO disagreed, concluding that there was no dispute that NAS’s proposal stated that its proposed innovations had been “implemented”–that is, prior to the period from which NAS drew the historical data used to calculate its projected savings. It was also uncontested that, during discussions, the agency requested that NAS “clearly delineate NAS’ proposal assumptions for all [deleted] costs.” GAO found nothing in NAS’s response to the agency’s explicit request that should have put the agency on notice that additional cost/price savings could be reasonably expected to flow from NAS’s already-implemented innovations.