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