Link: GAO Decision
Protestor: TrailBlazer Health Enterprises, LLC
Agency: Department of Health and Human Services
Disposition: Protest Denied.
1. Protest challenging agency’s cost realism evaluation of protester’s proposal is denied where the record demonstrates that agency’s conclusions were reasonable.
2. Protest that contracting agency improperly evaluated offerors’ technical proposals is denied where the record shows that the evaluation was reasonable and consistent with the stated evaluation criteria.
3. Protest challenging the agency’s failure to take awardee’s divestiture from its parent company into account as part of the technical and cost evaluations is denied where, at the time of contract award, the divestiture had not occurred and was only one possible response to an apparent organizational conflict of interest.
General Counsel P.C. Highlight:
TrailBlazer Health Enterprises, LLC protested the award to Highmark Medicare Services, Inc. (HMS) of a contract to obtain a Medicare Administrative Contractor (MAC) to provide certain health insurance benefit administrative services. TrailBlazer objected to the evaluation of cost and technical proposals, as well as the agency’s failure to consider the impending divestiture of HMS by its parent company.
The GAO found the agency’s cost realism evaluation of TrailBlazer’s proposal to be reasonable, finding the methodology for determining realism well suited to a full and fair consideration of the unique characteristics of an offeror’s proposed approach. The GAO believed the agency’s specific adjustments to TrailBlazer’s cost proposal were reasonable, based on the agency’s conclusions that certain rates were not adequately explained in the proposal. The GAO also found no merit to TrailBlazer’s assertion that the agency’s cost realism treated offerors unequally. The GAO rejected TrailBlazer’s challenges to the propriety of the agency’s evaluation of the HMS and TrailBlazer proposals under the non-cost evaluation factors. Finally, the GAO found no reason to sustain the protest based on the fact that the agency did not take into account HMS’s possible divestiture from its parent company as part of the evaluation of proposals.
Where an offeror proposes innovations that will result in substantial labor or cost savings, they should provide detailed explanations supporting the lower rates. Failure to adequately explain the difference in rates could result in the assessment of a weakness or a lower evaluation rating than would otherwise be awarded.