BNUMBER:  B-281388; B-281388.2; B-281388.3 
DATE:  February 3, 1999
TITLE: OMV Medical, Inc.; Saratoga Medical Center, Inc., B-281388; B
-281388.2; B-281388.3, February 3, 1999
**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective 
Order.  This redacted version has been approved for public release.
Matter of:OMV Medical, Inc.; Saratoga Medical Center, Inc.

File:     B-281388; B-281388.2; B-281388.3

Date:February 3, 1999

Craig A. Holman, Esq., and Frank K. Peterson, Esq., Holland & Knight, 
for OMV Medical, Inc.; and Norman J. Philion, Esq., Peter A. Greene, 
Esq., Edward V. Hickey, III, Esq., and Danielle E. Berry, Esq., 
Thompson, Hine & Flory, for Saratoga Medical Center, Inc., the 
protesters.
Jonathan M. Bailey, Esq., for Professional Performance Development 
Group, Inc., an intervenor.
Clarence D. Long, III, Esq., and Capt. David A. Whiteford, Department 
of the Air Force, for the agency.
Linda C. Glass, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Determination to select lowest priced technically acceptable 
proposal for award of contract, and determination that the awardee's 
prices were realistic are unobjectionable where both determinations 
were made in a manner consistent with the evaluation criteria, and the 
awardee's professional compensation plan and base salaries compared 
favorably with other offerors and with the current average annual 
salary standard.  

2.  Agency did not relax solicitation's adequate compensation 
requirements and did not misleadingly cause offeror to maintain 
(rather than lower) its proposed professional compensation, where the 
agency was consistent in the concerns it raised with offerors about 
professional compensation, and made award to an offeror whose 
professional compensation compared favorably with the current average 
salary standard and the Bureau of Labor Statistics Occupational 
Outlook Handbook, and was actually higher than the protester's.

3.  Firms which offered the third and fourth lowest prices of six 
technically equal proposals are not interested parties to protest that 
the contracting agency improperly evaluated the awardee's proposal 
since, as provided by the solicitation, price properly was the 
determinative factor for award and the protesters would not be in line 
for award if the allegation were sustained.   

DECISION

OMV Medical, Inc. and Saratoga Medical Center, Inc. protest the award 
of a contract to Professional Performance Development Group, Inc. 
(PPDG) under request for proposals (RFP) No. F41622-98-R-0017, a 
competitive small disadvantaged business set-aside, issued by the 
Department of the Air Force to acquire clinical social services under 
the Family Advocacy Program (FAP) for Air Force personnel and their 
families in the Continental United States (CONUS), Eastern region.  
Both protesters principally assert that the agency failed to adhere to 
the RFP's announced evaluation standard, relaxed the RFP's adequate 
compensation requirements, failed to meaningfully evaluate price 
realism and misled them into failing to reduce their proposed 
professional compensation.  The protesters also contend that the Air 
Force engaged in prejudicially unequal discussions with certain 
offerors.

We deny the protests.

BACKGROUND

The RFP, issued July 7, 1998, called for offerors to provide Family 
Advocacy Treatment Managers, Family Advocacy Outreach Managers, Family 
Advocacy Nurse Specialists and Family Advocacy Program Assistants as 
needed, specifying estimated quantities and locations for military 
bases in the CONUS Eastern region.  RFP  sec.  B.  The RFP contemplated 
award of a fixed-price, indefinite-quantity contract for a base year 
with four 1-year options and stated that the agency would employ 
performance/price tradeoff techniques to make a best value award 
decision.  RFP  sec.  M.4.a.  The RFP went on to state that, if the 
technically acceptable offeror submitting the proposal with the lowest 
evaluated price received a low performance risk rating and was found 
responsible, that proposal would represent the "best value."  RFP  sec.  
M.4.b.4.  The RFP provided that award could be made to other than the 
offeror that submitted the lowest priced technically acceptable 
proposal if that offeror was "judged to have a moderate, high, or not 
applicable performance risk rating."  RFP  sec.  M.4.b.5.  Concerning past 
performance, the RFP stated that a performance risk assessment would 
be conducted and required offerors to submit information on relevant 
contracts performed within the last 3 years which demonstrate their 
ability to perform the proposed effort.[1]  RFP  sec.  L.901, Vol. IIIa.  
The RFP further provided for an evaluation of the price proposals for 
realism.  RFP  sec.  M.2.  

The solicitation required offerors to submit a total compensation plan 
setting forth base salaries and fringe benefits proposed for the 
professional employees.  
RFP  sec.  L.901, Vol. II.b  sec.  6.  Offerors were cautioned that the 
government was concerned with the quality and stability of the 
workforce and that professional compensation that was unrealistically 
low or not in reasonable relationship with the various job categories 
might impair the contractor's ability to attract and retain competent 
professional service employees, and could be viewed as evidence of 
failure to comprehend the complexity of the requirements.  RFP  sec.  
L-95.c.

The RFP also provided for offerors to demonstrate through oral 
presentations how they planned to meet the stated RFP requirements, 
and to show that the offeror had the necessary understanding, 
expertise, personnel and experience to successfully accomplish the 
work required in the statement of work.  RFP  sec.  L.901, Vol. I.  Six 
firms whose proposals had been determined technically acceptable for 
the FAP acquisition for either the European or the CONUS Western 
regions were exempted from making oral technical presentations for 
this procurement.  RFP  sec.  L.901, Vol.I and Amendment No. 0001.  They 
were required, however, to submit documentation regarding the 
qualifications of their proposed program managers. 

On August 7, 1998, the agency received seven proposals, and OMV and 
PPDG made technical presentations on August 18.  On August 25, five 
offerors, including Saratoga, were advised that their proposed base 
salaries for some of the labor categories were unrealistically low.  
PPDG was specifically advised that its salaries for the treatment 
manager and outreach manager categories for the CONUS Eastern region 
were at least [deleted] below the current average annual salaries, and 
that for program assistants its salaries were approximately [deleted] 
below the current range.  Agency Report, Tab 5a.  Saratoga was advised 
that its proposed salaries for the treatment manager for the CONUS 
Eastern region were at least [deleted] below the current average 
annual salaries.  Agency Report, Tab 5b.  The contracting officer 
concluded that proposal revisions were needed from these five offerors 
to ensure their complete understanding of the requirements.  Agency 
Report, Tab 8.  After receipt and evaluation of the five revised 
proposals, all seven offerors were included in the competitive range.  
All offerors were given the opportunity to submit final proposal 
revisions by September 8.  The final evaluation of offers was as 
follows:

OFFEROR             TECHNICAL       PRICE    PERFORMANCE RISK

A                   Acceptable     [deleted]      Low
PPDG                     Acceptable     [deleted]      Low  
B                   Acceptable     [deleted]      Low
OMV                 Acceptable     [deleted]      Low
Saratoga            Acceptable     [deleted]      Low
C                   Acceptable     [deleted]      Low
D                   Acceptable     [deleted]      Low  

Agency Report, Tab 2.

With respect to Offeror A, which submitted the lowest priced 
qualifying proposal, the Small Business Administration advised the 
agency that the firm was not eligible for award of a small 
disadvantaged business set-aside.  Accordingly, on October 15, the 
award was made to PPDG on the basis that it had submitted the lowest 
priced technically acceptable proposal with a low performance risk, 
and these protests followed.

OMV's PROTEST

OMV's first complaint is that the agency improperly changed the basis 
for award from best value to one based on low price.

The RFP, as outlined above, stated that the agency would make a "best 
value award," which the RFP went on to specify meant selection of the 
offeror submitting the lowest priced technically acceptable proposal 
if it also received a low performance risk rating.  The RFP provided 
for a performance/price tradeoff only if the offeror submitting the 
lowest priced technically acceptable proposal was judged to have a 
moderate, high or inapplicable performance risk rating.  Here, the 
lowest priced technically acceptable proposal also received a low 
performance risk rating and in accordance with the RFP represented the 
best value to the government.  Accordingly, the award to PPDG was 
consistent with the RFP award criteria.

Next OMV contends that the agency materially misled it by cautioning 
it against lowering professional compensation from levels under 
predecessor contracts for essentially the same professional work and 
then failing to meaningfully evaluate all offerors' proposed 
professional compensation plans, and that the agency relaxed the RFP's 
adequate compensation requirements.

We review an agency's evaluation of proposals to ensure that it is 
fair, reasonable, and consistent with the evaluation criteria stated 
in the solicitation.  Wind Gap Knitwear, Inc., B-261045, June 20, 
1995, 95-2 CPD  para.  124 at 3.  Here, the record establishes that OMV was 
not "misled" since the agency reasonably evaluated the offerors' 
proposed compensation plans, and did not relax the RFP's adequate 
compensation requirement.  As noted above, the RFP warned all offerors 
about the government's need for a high quality, stable workforce and 
that proposed professional compensation that was unrealistically low 
or not in reasonable relationship with the various job categories 
might impair the contractor's ability to attract and retain competent 
professional service employees, and could be viewed as evidence of 
failure to comprehend the complexity of the requirements.  RFP  sec.  
L-95.c.  To ensure that an adequate compensation plan was offered, a 
salary standard for the CONUS Eastern region was developed.  Agency 
Report, Tab 7.  In this regard, the agency requested from current 
contractors the average annual salaries paid to current employees by 
position.  Id.  The lowest average salaries paid by position for the 
CONUS Eastern region were used to establish the minimum salary 
requirements for purposes of proposal evaluation.  Id.  After 
receiving initial proposals, the agency in its evaluation found 
deficiencies in the proposed compensation rates for five of the seven 
proposals received.  These five offerors were advised that their 
proposed compensation was considered inadequate to obtain and keep 
suitably qualified professional employees.  After receipt of final 
proposal revisions, the evaluation team analyzed compensation levels 
per position and on an overall basis.  The final total annual salaries 
proposed by the awardee and the protesters were as follows:

    POSITION                  PPDG      SARATOGA    OMV

    Treatment Manager      [deleted]   [deleted]       [deleted]  

    Outreach Manager       [deleted]   [deleted]       [deleted]  

    Nurse                  [deleted]   [deleted]       [deleted]  

    Assistant              [deleted]   [deleted]       [deleted]  

    Total Annual Compensation   [deleted]   [deleted]   [deleted]  
Agency Report, Tab 2. 

The offerors' proposed compensation was compared between offerors and 
was also compared to the Air Force's current average annual salary 
standard for each labor category and to the Occupational Outlook 
Handbook.  Moreover, PPDG's salary for every professional category is 
higher than those of both OMV and Saratoga, and the total salary 
compensation for all three offerors is approximately equal, which by 
itself strongly suggests that OMV's objection in this regard is 
factually misplaced.[2]  Further, as the record shows, the agency did 
not relax the professional compensation requirement and reasonably 
evaluated the offerors' proposed professional compensation for all 
offerors in a reasonable and consistent manner.

OMV also contends that the agency arbitrarily neutralized past 
performance as an evaluation discriminator by according all offerors 
"low risk" performance ratings regardless of experience, which was 
allegedly prejudicial to OMV as the incumbent.

Where a solicitation requires the evaluation of offerors' past 
performance, an agency has discretion to determine the scope of the 
offerors' performance histories to be considered, provided all 
proposals are evaluated on the same basis and consistent with the 
solicitation requirements.  Federal Envtl. Servs., Inc., B-250135.4, 
May 24, 1993, 93-1 CPD  para.  398 at 12.  Here, the main purpose of the 
past performance evaluation was for the agency to identify and review 
relevant present and past performance in order to make an overall risk 
assessment of the offeror's ability to perform the requirement.  RFP  sec.  
M.3.c.  In order to do so, the agency sent questionnaires to a minimum 
of two references provided by each offeror.  Based on the responses 
received, the agency concluded that all offerors were capable of 
performing and, thus, all received a low performance risk rating.  
Although OMV challenges the relevance of the references submitted by 
some offerors, we find nothing unreasonable in the Air Force's 
approach to investigating the past performance history of the offerors 
and, based on that investigation, in concluding that all offerors 
presented a low risk of nonperformance.

Next, OMV objects that the Air Force failed to meaningfully evaluate 
the offerors' price proposals for realism, reasonableness, and 
completeness as required by the RFP.
  
Where, as here, the award of a fixed-price contract is contemplated, a 
proposal's price realism is not ordinarily considered, since a 
fixed-price contract places the risk and responsibility for contract 
costs and resulting profit or loss on the contractor.  HSG-SKE, 
B-274769, B-274769.3, Jan. 6, 1997, 97-1 CPD  para.  20 at 5.  However, 
since the risk of poor performance when a contractor is forced to 
provide services at little or no profit is a legitimate concern in 
evaluating proposals, an agency in its discretion may, as here, 
provide for a price realism analysis in the solicitation of 
fixed-price proposals.  Volmar Constr., Inc., B-272188.2, Sept. 18, 
1996, 96-2 CPD  para.  119 at 5.  The FAR provides a number of price 
analysis techniques that may be used to determine whether prices are 
reasonable and realistic, including a comparison of the prices 
received with each other, FAR  sec.  15.404-1(b)(2)(i) (FAC 97-02); with 
previous contract prices for the same or similar services, FAR  sec.  
15.404-1(b)(2)(ii); and with an independent government cost estimate, 
FAR  sec.  15.404-1(b)(2)(v).  The depth of an agency's price analysis is a 
matter within the sound exercise of the agency's discretion.  
Ameriko-OMSERV, B-252879.5, Dec. 5, 1994, 94-2 CPD  para.  219 at 4; Ogden 
Gov't Servs., B-253794.2, Dec. 27, 1993, 93-2 CPD  para.  339 at 7.

Here, the RFP stated that price proposals would be evaluated for 
realism, reasonableness and completeness, and provided that the 
evaluators would consider the reasonableness of the proposed price 
versus proposed staffing.  RFP  sec.  M.2.  The RFP further stated that 
there should be a clear and concise correlation between the offeror's 
ability to meet the requirements and the offeror's technical 
information to support a positive determination as to the realism, 
reasonableness, and completeness of the offeror's price.  Id.  For the 
price realism analysis, the RFP stated that evaluators would assess 
the compatibility of the proposed price with the proposal scope and 
efforts, the list of estimating ground rules and assumptions, and the 
schedule duration.  To determine reasonableness, evaluators were to 
determine that (1) the offeror's estimates are based on factual, 
verifiable data and the estimating methodology employed is sound under 
current market conditions, 
(2) the estimated costs are most likely to be incurred by the offeror 
in the performance of the contract, and (3) the estimated total cost 
and profit are reasonable to the seller and reasonable to the buyer.  
For an offer to be determined complete, the RFP stated that the 
offeror must provide all the data necessary to support the offer.  Id.

The record in this case shows that to assess realism, the offerors' 
prices were compared against the RFP requirements to ensure that all 
areas of the acquisition were reflected in the proposal.  Agency 
Report, Tab 8.  For completeness, each proposal was compared against 
the RFP to ensure compliance and the proposals were also compared 
against the requirements in the RFP to verify that all areas were 
addressed.  Id.  For reasonableness, offerors' assumptions, proposed 
profit rates, and contract summary information were evaluated.  Id.

Proposed prices were reviewed by the price analyst and where it was 
determined that proposed compensation was unrealistic, discussions 
were held with those offerors.  After evaluation of all final proposal 
submissions, the agency concluded that all offerors' proposed wages 
were in line with existing contracts and the 1998-99 Bureau of Labor 
Statistics Occupational Outlook Handbook.  In sum, the agency 
performed a detailed price evaluation consistent with the RFP plan, as 
a result of which the agency concluded that PPDG's prices were 
reasonable.  

OMV's main objection to the price realism analysis concerns the 
awardee's alleged failure to proposed professional compensation at the 
minimum acceptable level.  However, as previously noted, the agency 
reasonably concluded otherwise, and PPDG's professional compensation 
is actually higher than OMV's.  In sum, there is no merit to OMV's 
allegation that the agency failed to properly evaluate the proposal 
for price realism or failed to properly evaluate PPDG's employee 
compensation plan.

Next, OMV contends that the agency conducted prejudicially unequal 
discussions and engaged in improper auction techniques by providing 
PPDG and several other offerors with specific knowledge and direction 
regarding minimum acceptable salary levels in key labor categories.  
As noted above, discussions were held with five of the seven offerors 
because these offerors initially proposed base salaries for some of 
the labor categories that were considered to be unrealistically low.  
Agency Report, Tab 8.  The contracting officer determined that 
clarifications with these offerors were necessary to ensure the 
offerors' complete understanding of the requirements.  During 
discussions with these offerors, the Air Force provided specific 
guidance for labor categories it had determined were not realistically 
priced.  These offerors were provided the opportunity to revise their 
proposals and the evaluation of the revised proposals resulted in 
their inclusion in the competitive range.  

The statutory and regulatory requirement for discussions with all 
competitive range offerors, 10 U.S.C.A.  sec.  2305(b)(4)(A)(i) (West 1998) 
and FAR  sec.  15.306(d)(1), means that such discussions must be 
meaningful, equitable, and not misleading.  I.T.S. Corp., B-280431, 
Sept. 29, 1998, 98-2 CPD  para.  89 at 6.  FAR  sec.  15.306(e)(1) prohibits 
government personnel from engaging in conduct that favors one offeror 
over another.  The Air Force's decision here to conduct discussions 
regarding compensation with those offerors that were evaluated as 
offering unrealistically low labor rates was not unreasonable.  The 
agency also provided those offerors specific guidance concerning the 
compensation of certain labor categories, in particular,  regarding 
the extent to which the agency believed their proposed employee 
compensation was inadequate relative to the current average salaries 
for certain labor categories, while offerors whose proposed 
compensation rates were considered realistic were not provided this 
information.  Even if it was inappropriate for the agency to provide 
only some of the offerors with such specific details about their 
proposed compensation, OMV was not prejudiced by these discussions 
because the awardee, in its final revised proposal, proposed 
professional compensation levels that were higher than the current 
average salary standard and were higher than the protester's levels 
for all three professional categories.  Further, while the awardee was 
also apprised of the agency's current average salary standard for the 
program assistant position, the awardee simply elected not to increase 
its proposed salary for this position.  Although the awardee's total 
price is lower than OMV's, its proposed professional compensation is 
higher than OMV's. 

OMV also contends that had it known the government's minimum 
acceptable salary for each position, it could have lowered its 
professional compensation and would have been more competitive with 
the awardee.  However, it is clear from the record that OMV's proposed 
higher total price was not due to relatively higher employee 
compensation but rather resulted from its higher prices elsewhere in 
its proposal.  Accordingly, OMV was not prejudiced by the agency's 
compensation disclosures to PPDG during discussions.  In addition, we 
note that the second low priced eligible offeror did not receive the 
benefit of such discussions and it, rather than OMV, would be next in 
line for award if the protest were sustained in this regard.  

SARATOGA'S  PROTEST

In its protest, Saratoga challenges the agency's decision to award to 
PPDG, alleging that the Air Force:  (1) erred in concluding that 
PPDG's proposal represented the most advantageous proposal; (2) erred 
in concluding that PPDG's price proposal was realistic; and (3) erred 
in concluding that PPDG was entitled to a low risk evaluation based on 
PPDG's limited past performance.[3]  These objections are not for 
consideration on the merits.  

Under the bid protest provisions of the Competition in Contracting Act 
of 1984, 
31 U.S.C.  sec.  3551-56 (1994), only an "interested party" may protest a 
federal procurement.  That is, a protester must be an actual or 
prospective supplier whose direct economic interest would be affected 
by the award of a contract or the failure to award a contract.  4 
C.F.R.  sec.  21.0(a) (1998).  Here, the record shows that all offerors 
were found technically acceptable with a low performance risk rating 
and that Saratoga submitted the fourth lowest priced proposal.  If the 
protester is correct in that PPDG should not have been awarded the 
contract, there are two other offerors next in line for award.  Thus, 
Saratoga is not an interested party to protest the award to PPDG.  
Watkins Sec. Agency, Inc., B-248309, Aug. 14, 1992, 92-2 CPD  para.  108 at 
4.  Although Saratoga maintains that an appropriate remedy for each of 
its protest grounds involves a reopening of competition, in fact, 
these protest issues concern only the propriety of the evaluation and 
selection of PPDG as the awardee.  Saratoga has not protested the 
evaluation of any of the intervening offerors' proposals.  

Likewise, to the extent OMV's protest raises specific challenges to 
the evaluation of the awardee's proposal, OMV is not an interested 
party since OMV submitted the third lowest priced proposal and would 
not be next in line for award after PPDG.  While in its comments to 
the agency report, filed December 11, OMV questioned the agency's 
evaluation of the intervening offeror's past performance, these 
comments were filed more than 10 days after receipt of the agency 
report and this issue is therefore untimely raised.  4 C.F.R.  sec.  
21.2(a)(2).

The protests are denied.

Comptroller General 
of the United States.     

1. Section M of the RFP stated that the purpose of the past 
performance evaluation was to identify and review relevant present and 
past performance and provided that  past and present performance 
information would be obtained through the use of simplified 
questionnaires or telephone interviews and using data independently 
obtained from other government and commercial sources.  RFP  sec.  M.3.

2. OMV asserts that the program assistant position is a professional 
position subject to the requirement of  sec.  L-95 of the RFP.  The agency 
maintains that because the program assistant position is primarily 
clerical and administrative in nature it is not subject to the 
professional compensation clause.  Program assistants were required to 
have completed a teacher certification program, or to have an 
associate degree in education or a related area, and to have knowledge 
of word processing systems.  RFP  sec.  C.1.4.4, C.1.4.4.1.  We agree with 
the agency that the program assistant position at issue is not one 
which calls for a professional employee.  The Federal Acquisition 
Regulation (FAR) provides that the term professional employee 
"embraces members of those professions having a recognized status 
based upon acquiring professional knowledge through prolonged study 
[and that] examples of these professions include accountancy, 
actuarial computation, architecture, dentistry, engineering, law, 
medicine, nursing, pharmacy, the sciences and teaching."  FAR  sec.  
22.1102.  Further, "[to] be a professional employee, a person must not 
only be a professional but must be involved essentially in discharging 
professional duties."  Id.  The program assistant position does not 
fall within this definition.

3. Saratoga also argues that the agency erred in the evaluation of its 
proposal in that the debriefing it received referred to the program 
manager it proposed for the European FAP procurement and not for the 
CONUS Eastern region procurement.  The agency states that Saratoga's 
proposal was properly evaluated, and even if the evaluators did 
confuse the program managers, we do not see how Saratoga was 
prejudiced since its proposed program managers were found acceptable 
for both procurements and Saratoga was determined to be acceptable 
with a low performance risk rating under all three procurements.  
Additionally, Saratoga contends that the debriefing information it 
received was incomplete and untimely.  A protester's challenge to the 
adequacy of a debriefing is a procedural matter concerning agency 
actions after award which are unrelated to the validity of the award; 
we generally will not review such matters.  C-Cubed Corp., B-272525, 
Oct. 21, 1996, 96-2 CPD  para. 150 at 4 n.3.  The purpose of a debriefing is 
not to give offerors the opportunity to cure deficiencies for the 
instant procurement, but to furnish the basis for the selection 
decision and contract award.  10 U.S.C.  sec.  2305(b)(5) (1994); Security 
Defense Sys. Corp., B-237826, Feb. 26, 1990, 90-1 CPD  para.  231 at 4.  
Finally, Saratoga argues that the agency erred in its application of 
the performance/price tradeoff decision. This issue has been addressed 
in our disposition of OMV's protest.