TITLE:  J&E Associates, Inc., B-283448, November 3, 1999
BNUMBER:  B-283448
DATE:  November 3, 1999
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J&E Associates, Inc., B-283448, November 3, 1999

Decision

Matter of: J&E Associates, Inc.

File: B-283448

Date: November 3, 1999

Barbara S. Kinosky, Esq., Karen R. Harbaugh, Esq., and James S. DelSordo,
Esq., Williams Mullen Clark & Dobbins, for the protester.

John R. Osing, Jr., Esq., Department of the Navy, for the agency.

Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest is denied where the protester fails to meaningfully challenge the
evaluation of its past performance and where the awards were made in
accordance with the terms of the solicitation.

DECISION

J&E Associates, Inc. protests the awards of contracts to Hunter Medical,
Inc., Sterling Medical Associates, and Chesapeake Center, Inc., under
request for proposals (RFP) No. N62645-99-R-0001, issued by the Naval
Medical Logistics Command, Department of the Navy, for multi-disciplinary
healthcare worker services for government medical treatment facilities in
the Portsmouth, Virginia area. J&E essentially challenges the agency's past
performance evaluation of its proposal and the award decisions.

We deny the protest.

The RFP, as amended, contemplated the award of three
indefinite-delivery/indefinite-quantity, fixed-price task order contracts to
those offerors whose proposals were determined most advantageous to the
government, technical evaluation factors and price considered. RFP amend. 5,
at 5 and attach. 1, at 3. The RFP listed two technical evaluation
factors--past performance and management plan for recruitment and retention.
(The former was twice as important as the latter.) RFP at 77, 80.

With respect to the past performance evaluation factor, the RFP required
offerors to describe their past performance within the past 5 years, with
the agency giving greater consideration to the most relevant experience,
that is, the provision of medical services similar to those identified in
the solicitation. Id. at 77. More specifically, offerors were advised to
provide past performance information corresponding to each of the following
broad categories of providers identified in the amended RFP schedule: (1)
healthcare provider services (e.g., family practice and pediatric
physicians, family and pediatric nurse practitioners, orthopedic physician
assistants, dermatologists, internists, OBGYNs, and radiologists); (2)
nursing services (e.g., primary care registered and licensed practical
nurses, medical assistants, nurse managers, health educators, and certified
registered nurse anesthetists); (3) ancillary support services (e.g.,
pharmacists, technicians (pharmacy, laboratory, radiology, dietetic,
emergency medical, mammography, and surgical/operating room), optometrists,
occupational therapy assistants, opticians, and phlebotomists); and (4)
allied health services (e.g., pharmacists, optometrists, audiologists,
clinical psychologists, clinical social workers, dieticians, occupational
and physical therapists, physician assistants, and speech pathologists).
These labor categories were to be furnished at the Naval Medical Center
Portsmouth and its branch clinics. RFP amend. 5, at 5 and attach. 5,
at 7-15. Offerors were advised that the agency would not assume that a firm
possessed any capability unless it was specified in its proposal. RFP amend.
5, at 5. The RFP also provided that the provision of medical services on
contracts at multiple locations would be considered as similar experience.
RFP at 77. An offeror's past performance would receive one of the following
adjectival ratings: very low risk, low risk, moderate risk, substantial
risk, and unknown risk. Agency Report, Tab 3, Source Selection Plan,
at 10-11.

With respect to the management plan evaluation factor, the RFP required
offerors to describe how they would recruit qualified personnel for
performance of the task orders; to describe plans, including information on
confirming healthcare worker credentials, to ensure timely commencement of
task order services; and to describe procedures and techniques to retain
personnel. RFP at 78. An offeror's management plan would receive an
adjectival rating of exceptional, acceptable, or unacceptable.

Agency Report, Tab 3, at 11.

With respect to price, offerors were required to provide unit and extended
prices for minimum quantities of labor hours for line item Nos. 1 through 3,
corresponding to categories of healthcare provider, nursing, and ancillary
support/allied health personnel. Prices for the minimum quantities under
these three line items would be determined at the time of award. Minimum
quantities under these line items would be satisfied by the issuance of task
orders at the time of award. RFP amend. 5, attach. 1, at 7-9, 15. Offerors
were also to provide not-to-exceed (NTE) unit and extended prices for
maximum quantities of labor hours for line item Nos. 4 through 8,
corresponding to categories of medical personnel exceeding the minimum
quantities. Id. at 10-15. Under the amended RFP, the offerors awarded
contracts for line item Nos. 1 through 3 would be given the opportunity to
compete for subsequent task orders (line item Nos. 4 through 8) and could
discount their NTE prices for these items based on specific locations and
performance periods. Id. at 15. All prices would be evaluated for
completeness, reasonableness, and realism. RFP amend. 5, at 6.

In determining those offerors whose proposals were most advantageous to the
government, the RFP provided that the combined technical evaluation factors
were significantly more important than price. Id. In addition, the RFP
provided for awards to other than the lowest priced proposal, and that price
premiums could be considered to facilitate awards to three different
offerors to gain the advantages associated with increased competition for
future task orders. Id.

Fifteen firms, including J&E, Hunter, Sterling, and Chesapeake, submitted
timely initial technical and price proposals by the stated closing time. The
proposals of these four firms were among those included in the competitive
range. The agency conducted multiple rounds of written and oral discussions
with the competitive range offerors. The relevant, final overall technical
rankings and evaluation factor ratings were as follows:

                  Past Performance       Management Plan

 (1) Sterling     Low Moderate Risk      Acceptable

 (2) Chesapeake   Low Moderate Risk      Acceptable

 (3) Hunter       Low Moderate Risk      Acceptable

 (7) J&E          High Moderate Risk     Acceptable

Agency Report, Tab 59, Supplemental Proposal Analysis Report, July 27, 1999,
at 6. [1]

As relevant here, for the past performance evaluation factor, the agency
believed that J&E adequately demonstrated performance on contracts similar
in magnitude and complexity to the solicitation requirements. J&E received
credit for having provided large numbers of healthcare workers under single
contracts at various geographic locations. The agency noted no particular
instances of poor or problematic performance by J&E. In fact, J&E's
references reported timely startup (very positive remarks), recruitment of
competent personnel, very successful provision of consistent and reliable
staffing, and overall outstanding quality of services. Agency Report, Tab 8,
Technical Evaluation Report, Apr. 12, 1999, at 6, 12.

However, the agency believed that J&E failed to demonstrate past performance
on contracts similar in scope to the solicitation requirements. In this
regard, the agency concluded that J&E demonstrated that it had provided
healthcare workers corresponding to some, but not all, of the provider
categories covered by the amended RFP. More specifically, J&E's proposal
showed that the firm has furnished an insignificant number of physicians,
some nurses, no pharmacists, and no technicians (pharmacy, laboratory,
radiology, or mammography). Instead, most of the firm's experience is in
furnishing personnel in support of family advocacy, counseling, and
occupational medicine efforts in non-hospital settings. Agency Report, Tab
4, J&E's Initial Proposal, at 2-10; Agency Report, Tab 40, Technical
Evaluation Team Reports, July 13, 1999, at 7; see also Agency Report, Tab 8,
at 6; Agency Report, Tab 10, Proposal Analysis Report, Apr. 15, 1999, at 15.

Based on information provided by J&E in its proposal, the agency concluded
that the firm's past performance, while successful, basically involved
providing healthcare workers in the areas of family advocacy, counseling,
and occupational medicine, not in providing medical personnel in support of
ambulatory/primary care settings. See Agency Report, Tab 59, at 15. In
contrast, Hunter, Sterling, and Chesapeake had experience in providing
medical personnel in support of ambulatory/primary care settings, which
represented the primary solicitation requirements. [2] Id. at 7-10.

Awards were made to Hunter (line item No. 1--healthcare providers); Sterling
(line item No. 2--nurses); and Chesapeake (line item No. 3--ancillary
support personnel). Hunter's price for line item No. 1 and Sterling's price
for line item No. 2 were lower than J&E's prices for these two line items.
Chesapeake's price for line item No. 3 was less than 1 percent higher than
J&E's price for this line item. Agency Report, Tab 11, Business Clearance
Memorandum, July 29, 1999, at 46, 55-56, 60, 69-70.

In challenging the agency's evaluation of its past performance, J&E offers
no meaningful rebuttal to the agency's conclusion that it did not have
experience providing primary care medical personnel in hospital settings and
that its experience involved the furnishing of healthcare workers only in
the areas of family advocacy, counseling, and occupational medicine.
Instead, J&E objects that the solicitation contained no qualifying language
to justify downgrading the firm's proposal based on its lack of experience
in providing primary care medical personnel in hospital settings.
Protester's Comments at 12. However, we believe that J&E is factually
incorrect.

The amended RFP specifically stated that the agency would not:

assume that the offeror possesses any capability unless it is specified in
the proposal. Offerors are advised that past performance information
provided should address each of the four broad categories of providers
identified in Section B.11 (e.g., Healthcare Provider Services (CLINs 0001
and 0004)[,] Nursing Services (CLINs 0002, 0005, and 0006), Ancillary
Support Services (CLINs 0003 and 0007), and Allied Health Services (CLIN
0008)), as specified in CLINs 0001 through 0008.

RFP amend. 5, at 5.

As relevant here, for line item Nos. 1 through 3, section B.11 of the
amended RFP stated that the contractor would perform healthcare provider,
nursing, and ancillary support services at the "Naval Medical Center
Portsmouth or one of its Branch Clinics." RFP amend. 5, attach. 1, at 7-9.

Based on the language above requiring offerors to establish their past
performance in providing healthcare workers in each of the four listed
categories and in specific medical center and branch medical clinic
settings, we believe an offeror, like J&E, should reasonably have expected
the agency to consider the extent to which a firm had experience in
providing the referenced categories of medical personnel in such settings.
Consistent with the terms of the solicitation, the agency reasonably
concluded that J&E did not have experience in providing primary care medical
personnel in hospital settings. [3]

In addition, J&E argues that in evaluating its past performance, the agency
should have considered its history of successfully hiring, orienting,
placing, and retaining qualified healthcare workers in a wide array of
settings. Protester's Comments at 13. Again, the agency did consider J&E's
record of recruiting and retaining healthcare workers, but concluded that
its historical record was in recruiting and retaining personnel in the areas
of family advocacy, counseling, and occupational medicine, not in recruiting
and retaining primary care medical personnel in hospital settings as
required by the solicitation. [4]

On this record, we believe J&E has failed to articulate any basis for
questioning the reasonableness of the agency's evaluation of its past
performance. [5]

J&E also challenges the agency's tradeoffs resulting in awards to Hunter and
Chesapeake, offerors submitting technically superior proposals. J&E makes
much of the fact that its NTE prices were lower than those of Hunter and
Chesapeake, maintaining that for this reason, it should have received awards
for line item Nos. 1 and 3. [6]

However, it is clear from the amended RFP that an offeror's fixed prices for
line item Nos. 1 through 3, not its NTE prices for line item Nos. 4 through
8, were the relevant prices to be considered in any price/technical
tradeoffs resulting in awards to offerors submitting the most advantageous
proposals. The NTE prices represented a worst-case scenario and were only
relevant when offerors awarded contracts for line item Nos. 1 through 3 were
given an opportunity to compete for subsequent task orders (line item Nos. 4
through 8). In other words, the NTE prices represented the maximum prices
the agency would be required to pay in the future for line item Nos. 4
through 8. RFP amend. 5, attach. 1, at 15. Thus, we think that an offeror's
NTE prices were not material to any tradeoffs made in awarding fixed-price
line item Nos. 1 through 3. [7]

In determining the most advantageous proposals, the solicitation provided
that the combined technical evaluation factors (past performance and
management plan) were significantly more important than price. The agency
also reserved in the solicitation the right to award to other than the
offeror with the lowest priced proposal. For line item No. 1, J&E's fixed
price was approximately 19 percent higher than Hunter's fixed price. For
line item No. 3, J&E's fixed price was less than 1 percent lower than
Chesapeake's fixed price. In these circumstances, where Hunter's price was
significantly lower than J&E's, and where there was only a

de minimis premium associated with Chesapeake's price, we conclude the
agency reasonably awarded contracts to Hunter and Chesapeake, firms which
submitted technically superior proposals reflecting their experience in
providing primary care medical personnel in hospital settings as required by
the solicitation.

The protest is denied.

Comptroller General
of the United States

Notes

1. At each stage of the evaluation process, the past performance and
management plan ratings were supported by detailed evaluation narratives.

2. For the management plan evaluation factor, the agency concluded that J&E,
as well as Hunter, Sterling, and Chesapeake, demonstrated that they could
recruit and retain personnel to successfully satisfy the solicitation
requirements. In addition, the prices submitted by these offerors were
considered complete, reasonable, and realistic.

3. Contrary to J&E's position, we do not believe the agency was required to
conduct discussions with the firm regarding its performance history. In this
regard, the record shows that the agency had no problems with J&E's record
of past performance, which otherwise could have been a basis for conducting
discussions with J&E. See Federal Acquisition Regulation sect. 15.306(d)(3).
Other than reiterating its record of past performance, J&E has provided no
substantive information which, if the firm had been afforded discussions,
could arguably have changed the agency's conclusion that J&E's experience
was limited to furnishing healthcare workers in the areas of family
advocacy, counseling, and occupational medicine.

4. J&E makes limited arguments with respect to the agency's past performance
evaluations of the proposals of Hunter and Chesapeake. Concerning Hunter's
healthcare provider (physician) contract, J&E acknowledges that Hunter has
provided physician services in the past, but complains that the dollar value
of those contracts was significantly less than that of the current
procurement. Protester's Comments at 18. However, while the dollar value of
prior contracts was one piece of information required to be considered in
evaluating the relevancy and similarity of an offeror's past performance,
the RFP clearly placed greater emphasis on how closely an offeror's
experience in furnishing healthcare workers corresponded to the broad
solicitation categories of medical providers. J&E does not dispute that
Hunter, unlike itself, had relevant physician experience in primary care
settings corresponding to line item No. 1, for which it was awarded a
contract.

Concerning Chesapeake, J&E simply acknowledges that Chesapeake has
experience providing mainly pharmacists and technicians, which correspond to
the medical personnel to be furnished under Chesapeake's contract for line
item No. 3. Protester's Comments at 19. Accordingly, we fail to see any
impropriety with respect to the evaluation of Chesapeake's past performance.

5. J&E also objects to the agency's use of "high" and "low" labels to
differentiate the moderate risk past performance ratings. While the agency's
source selection plan did not designate these additional labels, we do not
find objectionable the agency's use of such labels because they simply
reflected the agency's assessment of the degree to which an offeror's past
performance posed a moderate risk, as supported by the past performance
evaluation narratives.

6. J&E does not challenge the award to Sterling, which submitted a
technically superior, lower priced proposal (for line item No. 2 and for its
NTE prices).

7. In an abundance of caution, the agency noted in its source selection
documentation that it was worth paying an approximate 24 percent premium to
Hunter and an approximate 4 percent premium to Chesapeake in order to
receive the benefits of their technically superior proposals, namely, the
lower performance risk associated with Hunter's and Chesapeake's more
relevant past performance. Agency Report, Tab 11, at 55-56, 69-70.