BNUMBER: B-279773
DATE: July 16, 1998
TITLE: SouthWest Critical Care Associates, B-279773, July 16, 1998
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Matter of:SouthWest Critical Care Associates
File:B-279773
Date:July 16, 1998
Bruce T. Gipe, M.D., for the protester.
John R. Osing, Jr., Esq., Department of the Navy, for the agency.
C. Douglas McArthur, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
1. Under solicitation for health care services which directed
offerors to submit comprehensive plans for ensuring continuity of
service by proposed personnel, agency reasonably gave a higher rating
to proposal of offeror that had entered into a formal agreement with
another firm to provide emergency medical technician-paramedics, as
compared with protester's proposal to use more general recruiting
techniques.
2. Under solicitation that advised offerors that agency would not
dictate whether health care workers provided by the contractor would
be classified as "independent contractors" or "employees" for federal
tax purposes, contention, raised after award, that agency unreasonably
failed to take into account the tax consequences of awardee's plan to
treat proposed employees as independent contractors is an untimely
challenge to an alleged solicitation defect.
DECISION
SouthWest Critical Care Associates protests the award of a contract to
NES Government Services, Inc. under request for proposals (RFP) No.
N62645-98-R-0008, issued by the Naval Medical Logistics Command for
medical services. Southwest argues that the evaluation of its
proposal, as well as the evaluation of NES's proposal, were
unreasonable.
We deny the protest.
On November 3, 1997, the Navy issued the RFP for a fixed-price
contract to provide the services of physicians, registered nurses, and
emergency medical technician-paramedics (EMT-P) for the urgent care
clinic in Lemoore, California, for a 5-month base period, with five
1-year option periods. The RFP provided for award to the offeror
submitting the proposal determined "most advantageous to the
Government," considering price and other factors, with technical
factors significantly more important than price. RFP sec. M.2.
With respect to price, the RFP provided that the agency would evaluate
prices for completeness, reasonableness, and realism. RFP sec. M.3.(a).
The technical factors were implementation plan, recruitment and
retention plan, and past performance report. RFP sec. M.3.(b). In
pertinent part, the solicitation required offerors to "submit a
comprehensive recruitment and retention plan which describes in detail
the strategy for providing personnel to ensure the continuity of
services and care as required by the solicitation." RFP sec. M.3.(b)(2).
The cover sheet to the RFP contained the following legend:
Before submitting a proposal in response to this solicitation, a
prospective offeror is encouraged to investigate the potential
tax consequences should they elect to perform the resulting
contract by using subcontractors in lieu of individuals carried
on their payrolls. Under this RFP, the Navy does not dictate
whether the individual health care workers provided would be
classified by the successful offeror as "independent contractors"
or "employees" for federal tax purposes. This determination
shall be made solely by the offeror. If, subsequent to award,
the successful offeror's determination is challenged, this shall
be a matter to be resolved between the offeror and the Internal
Revenue Service (IRS). The Navy will not consider favorably any
request for equitable adjustment to the contract based upon the
successful offeror's receipt of an adverse decision by the IRS.
The agency received nine proposals prior to December 5, 1997, the date
set for receipt of initial proposals. It evaluated them, established
a competitive range of six offers, and conducted discussions. Among
the issues raised with Southwest was its failure to specify its
methods of recruitment, beyond a stated plan of contacting the
existing staff physicians and nurses for expressions of interest in
continued employment. Attachment to Navy letter dated February 11,
1998, at 1. The agency specifically pointed out that although
Southwest did plan to utilize pre-hospital services available in the
community, it had no agreement with any of the local companies to
provide EMT-P's. Southwest acknowledged, in its response, that it had
no agreement with local providers; the protester did outline plans to
create a recruiting network and to advertise opportunities for
employment as EMT-P's. Protester response to discussion questions,
February 17, 1998, at 5.
As a result of discussions, the protester's overall technical rating
improved from yellow/marginal to green/acceptable. While the
evaluators considered Southwest's response to the question of
recruiting EMT-P's acceptable, they considered NES's arrangement,
using an agreement with a local provider of EMT-P's, preferable.
Since NES had received the highest technical rating and had proposed
the lowest price of all offerors, the Navy selected NES for award, in
accordance with the RFP's stated selection criteria. This protest
followed.
Southwest contends that it was unreasonable to downgrade its proposal
because it had no formal written agreement with a local EMT-P
provider, since the solicitation did not require such an agreement.
Southwest states that it could have provided such an agreement if the
RFP had required it.
In reviewing a protest against the propriety of an evaluation, we
examine an agency's evaluation and selection decision solely to ensure
that they were reasonable and consistent with the stated criteria.
Rockhill Indus., Inc., B-278797, Mar. 16, 1998, 98-1 CPD para. 79 at 4.
Southwest is correct that the RFP did not require a formal written
agreement with a local EMT-P provider; the agency found Southwest's
proposal acceptable, although the protester did not have such an
agreement. We see nothing unreasonable in the agency's treatment of
NES's formal written agreement to obtain EMT-P's as superior to the
protester's stated plan to use general recruiting techniques to
provide staffing under the contract, particularly in view of the RFP's
direction to offerors to submit a comprehensive plan detailing their
strategy for providing personnel to ensure continuity of services.
Further, to the extent that Southwest argues that it could have
provided such a written agreement if the RFP had required one, the
record shows that the agency specifically directed the protester's
attention to the issue and that Southwest chose not to provide such an
agreement. The protester has provided nothing from which we can
conclude that the evaluation of Southwest's proposal was either
unreasonable or inconsistent with the stated evaluation criteria.
Southwest next argues that NES incorrectly classified its health care
workers as independent contractors rather than employees for federal
tax purposes. According to Southwest, this classification allowed NES
to propose lower overhead costs, with a resulting price advantage over
offerors like Southwest, who treated their workers as employees.
Southwest argues that treating the workers as independent contractors
is inconsistent with IRS guidelines and thus that award to NES is
improper.
Southwest's argument is an untimely challenge to an alleged defect in
the RFP. As indicated above, the RFP clearly stated that the
classification of health care workers was a determination to be made
by each offeror (subject, ultimately, to resolution between the
offeror and the IRS) and that the Navy would not render any decision
on the matter. Southwest now in essence argues that the RFP should
have required offerors to classify their workers as employees for
federal tax purposes; any such challenge to the Navy's position,
clearly set out in the RFP, had to be raised before the time set for
receipt of initial proposals. 4 C.F.R. sec. 21.2(a)(1) (1998); B & K
Enters., B-276066, May 7, 1997, 97-1 CPD para. 166 at 3. Given that the
RFP left the classification decision up to the offerors, the agency's
acceptance of NES's proposal, without regard to how it chose to
classify its workers for tax purposes, was consistent with the RFP.
Finally, to the extent that Southwest challenges the evaluation of
NES's proposal, Southwest is not an interested party to raise such
issues. The record shows that one other offeror proposed a lower
price, with a higher technical rating, than did Southwest; in
addition, one offeror had an equivalent technical rating and proposed
a lower price. Under the bid protest provisions of the Competition in
Contracting Act of 1984, 31 U.S.C.A. sec. 3551-56 (West Supp. 1997), and
our Bid Protest Regulations, 4 C.F.R. sec. 21.0(a), 21.1(a), only an
"interested party" may protest a federal procurement. A protest is
not an interested party where it would not be in line for contract
award were its protest to be sustained. ECS Composites, Inc.,
B-235849.2, Jan. 3, 1990, 90-1 CPD para. 7 at 1. Here, since two other
offerors would be in line for award if Southwest's challenge to the
evaluation of NES's proposal were sustained, Southwest is not an
interested party to maintain this ground of protest. See
Kaiserslautern Maintenance Group, B-240067, Oct. 12, 1990, 90-2 CPD para.
288 at 4.
The protest is denied.
Comptroller General
of the United States