Link: GAO Decision
Protestors: TriCenturion, Inc.; SafeGuard Services, LLC
Agency: Department of Health and Human Services, Centers for Medicare and Medicaid Services
Disposition: Protest Sustained in part, Denied in part.
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GAO Digest:
1. Challenge to the cost realism evaluation of the awardee’s proposed labor costs is sustained where the record does not demonstrate that the agency’s evaluation was reasonable.
2. Challenge to the evaluation of a protester’s technical evaluation is sustained where the agency does not meaningfully respond to the majority of the protester’s arguments.
3. Challenge to the evaluation of the awardee’s past performance is sustained where the record provided by the agency does not explain how it evaluated the relevance of offerors’ past performance, or whether its proposed subcontractors merited consideration under the terms of the solicitation.
4. Protest that the award was tainted by organizational conflicts of interest is denied where the record shows that the agency reasonably concluded that the potential areas of concern were adequately mitigated.
General Counsel P.C. Highlight:
TriCenturion, Inc. and SafeGuard Services, LLC (SGS) protested the award of a contract to Cahaba Safeguard Administrators, LLC for zone program integrity contractor (ZPIC) services.
Both protestors argued that the agency’s evaluation of the offerors’ cost and technical proposals, including past performance, was flawed. TriCenturion also argued that the agency failed to conduct meaningful discussions, and both protestors argue that the agency failed to reasonably evaluate organizational conflicts of interest (OCIs) arising from the award to Cahaba.
The GAO first sustained the protestors’ allegations that the agency improperly evaluated Cahaba’s proposed full-time equivalents (FTEs), noting that, although the agency expressed concerns that Cahaba’s proposed FTEs were understated/low, the contemporaneous record and hearing testimony did not reflect how the agency determined that the FTEs may be too low or why the agency determined the FTEs were realistic. The GAO then dismissed complaints about the evaluation of Cahaba’s ODCs and indirect costs, finding the contracting officer’s understanding of Cahaba’s accounting practices to be reasonable, as well as complaints that the protestors’ proposed costs should have been adjusted downward. It sustained SGS’s complaint that the technical evaluation of its proposal was unreasonable, finding the agency’s failure to respond to the majority of SGS’s complaint to constitute an admission. It finally also sustained the protestors’ complaints as to the evaluations of their past performances, again finding the record inadequate to conclude that the evaluations were reasonable.
The GAO dismissed TriCenturion’s complaint that the agency failed to provide an opportunity for meaningful discussions, noting that the issues in question were “minor weaknesses” that did not require discussions. It then dismissed the protestors’ complaint that the award to Cahaba was tainted by OCIs arising from its status as a wholly-owned subsidiary of Blue Cross/Blue Shield of Alabama (BCBSAL). It noted that the agency had properly investigated the possibility of OCIs, and that Cahaba had provided an OCI mitigation plan with specific details and milestones. Based on its conclusions regarding the unreasonableness of the agency’s evaluations regarding cost, technical and past performance proposals, the GAO recommended that the agency reevaluate the proposals, conduct discussions, and make a new selection decision.
Unsuccessful offerors should request a debriefing to better understand how the agency reached its selection decision. Where the agency fails to maintain adequate documentation of the reasoning behind its decisions, unsuccessful offerors may have an avenue for protest. Additionally, all offerors should pay close attention to any contractual relationships that may give rise to OCIs in future procurements. While constant vigilance may allow an offeror to prevent OCIs from occurring in the first place, a well-drafted and detailed mitigation plan can help an offeror with possible OCIs succeed in the bidding process.