BNUMBER: B-275784
DATE: March 27, 1997
TITLE: American Medical Professionals, Inc.
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Matter of:American Medical Professionals, Inc.
File: B-275784
Date:March 27, 1997
Sam Zalman Gdanski, Esq., for the protester.
James S. Ganther, Esq., for Seaborn Healthcare Services, an
intervenor.
John R. Osing, Jr., Esq., Department of the Navy, for the agency.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Allegation that contracting agency improperly misled protester into
raising its pricing over the course of the procurement is denied where
the record shows that the protester was only asked to verify the
pricing it had previously proposed; protester's determination to
ignore that request and to instead raise its pricing in response
reflects its own business judgment and no impropriety on the agency's
part.
DECISION
American Medical Professionals, Inc. (AMP) protests the award of a
contract to Seaborn Healthcare Services under request for proposals
(RFP) No. N62645-96-R-0003, issued by the Department of the Navy,
Naval Medical Logistics Command, for ultrasound technician services at
the Naval Medical Center in Portsmouth, Virginia. AMP chiefly argues
that the Navy conducted inadequate discussions with the firm.
We deny the protest.
The solicitation anticipated the award of a fixed-price contract for
the provision of these services by two ultrasound technicians over 1
base year, with up to 5 option years. The technicians are required to
perform their duties for 40 hours per week during normal business
hours. In addition, one technician is required to provide on-call
services, on an as-needed basis, from the end of a given workday
through the next morning. Award would be made to the offeror
submitting the lowest-priced, technically acceptable offer.[1]
The Navy evaluated the 10 proposals it received and included 8 in the
competitive range. Two rounds of discussions were conducted, and two
best and final offers (BAFO) were requested and received. The
proposals of six offerors were determined to be technically
acceptable, including those of Seaborn and AMP. Seaborn submitted the
lowest price for both technicians, at $258,519 and $228,800,
respectively. AMP submitted the third low price for the first
technician and the fourth low price for the second technician. Award
was made to Seaborn on December 17 and this protest followed. AMP
chiefly argues that the Navy failed to conduct meaningful discussions
with the firm.
Agencies are required to conduct meaningful discussions with all
offerors whose proposals are in the competitive range; this
requirement is satisfied by advising them of weaknesses and
deficiencies in their proposals which require amplification or
correction and by affording them the opportunity to submit revised
proposals. Federal Acquisition Regulation (FAR) sec. 15.610(c)(2) and
(5) (FAC 90-31); Ameriko, Inc., B-262029, Nov. 6, 1995, 95-2 CPD para.
208.
In this case, the initial evaluation showed that AMP had submitted the
same pricing for both the regular service hours and the on-call
service hours. This raised the concern that the firm had not
considered the higher cost of providing on-call services--the Navy's
experience with these contracts showed that on-call services were
generally priced higher than services for regular hours. The Navy's
July 22 discussion letter stated:
"Your prices for on-call services are identical to your prices
for regular services. Please verify your on-call services
pricing and provide evidence that you will be able to provide
on-call services for the prices proposed."
AMP's response did not verify the firm's on-call pricing or provide
evidence of its ability to provide these services at the prices
proposed. Instead, AMP substantially lowered its on-call pricing with
no explanation.
Needless to say, this response did not allay the Navy's concern. In
addition, the contract specialist noted that AMP's proposed pricing
for its regular services, which included cost loading, was lower than
the pricing shown in the Navy's market survey, which did not include
cost loading. This raised the additional concern that AMP's direct
labor compensation might be significantly lower than the market survey
labor rate. Consequently, the Navy's September 3 discussions letter
to AMP stated:
"1. Your Base Period, Option I, and Option II prices appear low
in comparison to the market area salaries. Please verify these
prices and provide evidence that you will be able to provide
services for the prices proposed.
2. Your prices for on-call services . . . are lower than your
prices for regular services. Please verify your on-call services
and provide evidence that you will be able to provide on-call
services for the prices proposed."
AMP's response did not verify any of the firm's pricing or provide
evidence of its ability to provide any of these services at its
proposed prices. Instead, AMP raised many of its prices and stated
that they were "verified," with no further explanation. AMP's on-call
services pricing remained at or near its pricing for the regular
services.
In view of AMP's response, the Navy's first BAFO request firm stated:
"Your price[s] for on-call services . . . appear low. While you
have verified your on-call service prices, you have not provided
evidence that you will be able to provide on-call services for
the prices proposed."
In its BAFO, AMP's on-call pricing remained at or near the pricing for
its regular services. However, for the first time, AMP provided the
evidence repeatedly requested by the Navy. AMP submitted
certifications from its proposed technicians in which each stated that
she would provide her on-call services at the proposed rates. The
Navy's second BAFO request made no mention of any pricing
deficiencies, and AMP's second BAFO did not revise its pricing.
AMP alleges that the Navy improperly failed to advise it of the
"central weakness" in its proposal--that it might not be able to
provide personnel at its proposed prices. This allegation reveals a
lack of familiarity with the record. There is no question but that
this weakness, while present in AMP's initial and revised proposals,
was resolved by the firm's BAFO submission of the above-discussed
certificates from its proposed technicians. Indeed, that AMP received
meaningful discussions on this issue is evidenced by the fact that it
submitted these certificates at the specific request of the Navy.
In any event, it appears that AMP is actually alleging that it was
improperly misled by the Navy during discussions into raising its
pricing over the course of the procurement. This allegation is
without merit. As indicated above, each and every discussion question
merely asked AMP to verify its pricing and to provide evidence that it
could provide services at those prices. There is nothing misleading
about these questions, and the fact that AMP chose to ignore the
agency's requests and to raise its pricing instead reflects its
business judgment and no impropriety on the part of the agency.
Ameriko, Inc., supra; Crestmont Cleaning Serv. & Supply Co., Inc., et
al., B-254486 et al., Dec. 22, 1993, 93-2 CPD para. 336; Eagle Technology,
Inc., B-236255, Nov. 16, 1989, 89-2 CPD para. 468.
As a final matter, AMP's contention that the contracting officer's
repeated requests for verification of its pricing amount to an
improper auction is similarly without merit. Prohibited auction
techniques include such actions as (1) indicating to an offeror a
price it must meet in order to receive further consideration; (2)
advising an offeror of its relative standing; and (3) furnishing
information about other offerors' prices. FAR sec. 15.610(e)(2). None
of these techniques was present here. Mil Colores, S.A., B-270208,
Feb. 16, 1996, 96-1 CPD para. 102.
The protest is denied.
Comptroller General
of the United States
1. Technical acceptability, not at issue here, would be determined
based upon the documented professional and technical experience of the
offered technicians.