TITLE:  GHE HealthCare, Inc., B-284786, June 6, 2000
BNUMBER:  B-284786
DATE:  June 6, 2000
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GHE HealthCare, Inc., B-284786, June 6, 2000

Decision

Matter of: GHE HealthCare, Inc.

File: B-284786

Date: June 6, 2000

William H. Miller for the protester.

Robert E. Richardson, Jr., Esq., for Sherman Psychological Services, an
intervenor.

Merilee D. Rosenberg, Esq., Philip Kauffman, Esq., and Phillipa L. Anderson,
Esq., Department of Veterans Affairs, for the agency.

Jacqueline Maeder, Esq. and Paul Lieberman, Esq., participated in the
preparation of the decision.

DIGEST

1. Protest that agency improperly evaluated proposals is denied where the
record shows that the evaluation was reasonable and consistent with the
stated evaluation factors.

2. Agency determination to award to offeror whose proposal reflected overall
technical superiority at a slightly higher price than protester is
unobjectionable where solicitation provided that technical considerations
were more important than price, and the agency reasonably concluded that the
proposal's technical superiority warranted the extra associated cost.

DECISION

GHE HealthCare, Inc. (GHE) protests the award of a contract to Sherman
Psychological Services (Sherman) under request for proposals (RFP) No.
549-7-2000, issued by the Department of Veterans Affairs (VA), Medical
Center Dallas, Texas, as a small business set-aside for readjustment
counseling services. GHE argues principally that it should have received the
award because of its lower price and that Sherman's proposal was improperly
evaluated. The protester also asserts that the agency failed to provide
notice that one of the protester's current employees represented its
competition.

We deny the protest.

The solicitation, issued on August 26, 1999, contemplated the award of a
fixed-price contract for a base year with two 1-year options to provide
readjustment counseling services to eligible veteran beneficiaries in Lamar
and Grayson counties, Texas. RFP Part II-2, at 6. Offerors were required
either to have "a physically handicapped accessible outreach/counseling
facility located in the counties of Texas for which services are being
offered or be able to furnish required services through referral agreement,
affiliation, or consultant arrangements through a licensed or qualified
provider" in the relevant area. RFP Part II-4, at 8.

Proposals were to be submitted in 14 separate parts, and the RFP provided
guidelines as to what information was to be presented in each of these
parts. Part 1 was to contain each offeror's completed standard form (SF)
1449 and required certifications; parts 2 through 9 were to address the
offeror's method of satisfying the agency's minimum needs; and, parts 10
through 14 were to contain information concerning the offeror's method of
addressing specified additional evaluation criteria. RFP Part IV-3, at 29.
The RFP advised that proposals would be evaluated and point-scored on the
minimum needs factors (parts 2 through 9) and on the additional criteria
(factors 10 through 14). RFP Part V-1, at 33. The agency's minimum needs
included, among other things, a specified core staff and facility
description, under which the offeror was required to demonstrate that it had
at least one psychiatrist or doctoral level psychologist or master of social
work level psychiatric social worker on its staff. If the offeror could not
provide one of the counselors listed above, it was required to have a mental
health-related masters level counselor, and have a psychiatrist, doctoral
clinical psychologist, psychiatric social worker or psychiatric clinical
nurse specialist serving as a consultant on call during regular working
hours to perform services and/or be immediately accessible for consultation.
RFP Part IV-3, at 30.

The solicitation provides that the government "will award a contract
resulting from this solicitation to the responsible offeror whose offer
conforming to the solicitation will be most advantageous to the Government,
price and other factors considered," RFP Part V-1, at 33, and advised
offerors that the VA intended to award a contract without discussions. RFP
Part IV-1(g), at 26. Offerors were required to provide a per-session rate
for the clinician who would perform the services for individual therapy,
group therapy and couple/family therapy sessions, RFP Part 1, at 2, and the
solicitation provided that for award purposes, the agency would add the
total price for all options to the total price for the basic requirement.
RFP Part V-1(b), at 33. Price was to be point-scored and was equal in weight
to the minimum needs factors.

RFP Part V-1(a), at 33.

Three proposals were received, including those of GHE and Sherman, by the
September 20, 1999 closing date. After reviewing the proposals, the
contracting officer eliminated one proposal from further consideration for
failure to satisfy a mandatory solicitation requirement. Agency Report at 2.
Additionally, the contracting officer noted that the two remaining offerors
had both proposed the same psychologist as principal counselor in their
proposals. The proposed psychologist was currently serving as the principal
counselor for GHE, providing readjustment counseling services under GHE's
contract with the VA, but GHE did not include with its proposal any
statement or document confirming that the psychologist intended to continue
his employment with GHE. Agency Report at 2. Indeed, the psychologist had
himself signed and submitted the other proposal on behalf of Sherman. On
September 30, the contracting officer contacted GHE to request that GHE
extend the current contract for 3 months. The contracting officer did not
disclose that GHE's psychologist had submitted a proposal on his own behalf.
Agency Report, exh. 1, Contracting Officer's Statement, at 1. Subsequently,
by letter dated November 5, the contracting officer requested that GHE
clarify whether the psychologist was under formal contract with GHE. The
contracting officer explained to the protester that the agency needed the
information because the psychologist had submitted his own proposal in
response to the solicitation. The contracting officer asked that GHE provide
the agency with a copy of a signed contract if the psychologist was under
formal contract with GHE. Agency Report, exh. 3, Letter from Contracting
Officer to GHE 1 (Nov. 5, 1999).

By letter dated November 17, GHE responded that it had received a letter
from the psychologist's attorney regarding the psychologist's 1994 contract
with GHE advising that the contract was no longer valid and that the
psychologist could compete with GHE. GHE stated that it reluctantly accepted
the attorney's position, did not challenge the psychologist's decision to
compete for the contract, and withdrew the psychologist's name from GHE's
proposal. Agency Report, exh. 4, Letter from GHE to Contracting Officer 1
(Nov. 17, 1999). GHE asked if it could revise its proposal sometime during
the next 30 days to name a new psychologist, and make various other changes.
Id. at 1-2. GHE also accepted the 3-month contract extension and asked if it
could substitute another counselor for the psychologist to finish the
counseling work under the extension. Id. at 1.

The contracting officer determined not to allow GHE to revise its proposal
but never specifically denied GHE's requests. [1] Agency Report, exh. 1,
Contracting Officer's Statement, at 2. Agency personnel evaluated the
proposals and assigned a point score for each of the evaluation factors and
price. The maximum possible score was 825, including 330 points for minimum
needs, 165 for the additional criteria, and 330 for price. Agency Report,
exh. 8, Evaluation Summary, at 6-7. GHE's proposal received a total
technical score of 381.6 and, because it was the low offer, a price score of
330 for a total score of 711.6. Id. Sherman's proposal received a total
technical score of 440 and a price score of 310.2 for a total of 750.2. Id.
GHE's proposal was downgraded under the experience factor because its
proposed counselors had limited experience in the treatment of Vietnam-era
and/or post-Vietnam war zone veterans. Id. at 8-9. GHE's proposal was also
downgraded because it failed to adequately address its continuing education
plans. Id. at 9. Both GHE's and Sherman's proposals were downgraded because
the offerors failed to provide documentation of specific or formal training
for counseling Vietnam-era or post-Vietnam war zone veterans and because
they failed to document the veteran status of their proposed counselors. Id.
Both offerors received the maximum point score under the other factors. The
contracting officer determined that Sherman's proposal was the most
advantageous to the government based on technical factors and price. Id. The
agency notified GHE that it had not been selected for award and GHE filed
this protest with our Office.

GHE protests that it offered the low price and, because its proposal is the
more cost effective to the government, it should have been awarded the
contract. Protester's Comments at 1. GHE contends that Sherman's proposal
should have been downgraded because Sherman did not propose a back-up
counselor and has only one facility. Id. at 2. GHE notes that it has a
facility in each of the counties to be served and that it offered more than
one counselor; therefore, it asserts, the two proposals should not have
received identical ratings on the core staff and facility factor. Id. GHE
also contends that the agency improperly failed to notify it in September
that GHE's own psychologist/principal counselor was competing against GHE
under the solicitation and improperly failed to respond to its question
concerning a replacement counselor under its current contract. Id. at 2. The
protester argues that if it had learned of the conflict in September or if
the agency had responded to its question about replacing the psychologist
during the contract extension period, its other counselors would have had
the opportunity to acquire additional experience in counseling Vietnam-era
veterans which then would have improved GHE's score under the experience
factor. [2] Id.

The evaluation of technical proposals is a matter within the contracting
agency's discretion since the agency is responsible for defining its needs
and the best method of accommodating them. Loral Sys. Co., B-270755, Apr.
17, 1996, 96-1 CPD para. 241 at 5. In reviewing an agency's technical
evaluation, we will not reevaluate the proposal, but will examine the record
of the evaluation to ensure that it was reasonable and in accordance with
stated evaluation criteria and not in violation of applicable procurement
statutes and regulations. Id. Mere disagreement with the agency's

evaluation does not render the evaluation unreasonable. Davies Rail and
Mechanical Works, Inc., B-278260.2, Feb. 25, 1998, 98-1 CPD para. 134 at 5.
Where, as here, the RFP provides that award will be made on the basis of the
most advantageous offer, there is no requirement that award be made on the
basis of low price. JSA Healthcare Corp., B-252724, July 26, 1993, 93-2 CPD
para. 54 at 6. A procuring agency has the discretion to select a more highly
rated technical proposal if doing so is reasonable and consistent with the
evaluation methodology set forth in the RFP, and award to a higher rated
offeror with higher proposed costs can be justified where the technical
superiority of the selected offeror's proposal outweighs the price premium.
Id.

Here, the RFP provided that the technical proposal would be considered more
important than price and the agency found the awardee's proposal technically
superior to the protester's proposal. GHE's contention that Sherman's
proposal was improperly evaluated because Sherman has only one facility and
proposed only one counselor is without merit. The solicitation required that
offerors have a handicapped-accessible facility in one of the counties to be
served. RFP Part II-4, at 8. As to the number of counselors, the
solicitation stated that each offeror was to have at least one psychiatrist
or doctoral level psychologist or masters in social work level psychiatric
social worker. If none of these counselors were available, the offeror could
propose a masters level counselor with a consultant on call. RFP Part IV-3,
at 30.

In its proposal, Sherman specifically stated that it had a
handicapped-accessible facility in Grayson county. Additionally, Sherman
named a doctoral level psychologist as its principal counselor and proposed
another doctoral level psychologist as a back-up counselor. Vitae for both
counselors were included in Sherman's proposal. Thus, since Sherman's
proposal satisfied the mandatory solicitation requirements, consistent with
the evaluation criteria, the agency reasonably awarded Sherman's proposal
the total available points under the core staff and facility factor. GHE's
disagreement with this evaluation does not make it unreasonable. Davies Rail
and Mechanical Works, Inc., supra. As to the protester's position that its
low price should be dispositive, this was a procurement in which technical
considerations were more important than price, and in light of the technical
superiority of the awardee's proposal and the relatively small price
difference, VA's determination that Sherman's technical superiority
outweighed the associated price difference is unobjectionable.

GHE's objection that the VA did not timely inform GHE that its current
psychologist was competing for the award is essentially an allegation that
the agency somehow permitted the awardee to obtain an unfair competitive
advantage. However, GHE has cited no support for its contention that the VA
had a duty to immediately disclose the identity of its competition. In fact,
on the contrary, the Federal Acquisition Regulation (FAR) instructs agencies
to safeguard such source selection information contained in proposals before
a contract award is made. FAR sect. 15.207; Lederle-Praxis Biologicals,
B-255996, B-255996.2, Apr. 25, 1994, 94-1 CPD para. 277 at 6. Finally, regarding
the protester's contention that the agency improperly failed to permit GHE
to replace its primary counselor during the 3-month contract extension
period, which might have resulted in an improved proposal score under the
experience factor, to the extent that this encompasses anything beyond a
matter of contract administration, the protester has not cited any legal
basis, nor are we aware of any, which would require the agency to permit
such a substitution.

The protest is denied.

Comptroller General
of the United States

Notes

1. The agency determined not to allow GHE to revise its proposal because it
did not want to conduct discussions; it viewed the exchange of information
regarding the psychologist as a clarification. Subsequently, the award
decision was made without the conduct of any discussions, as provided for by
the RFP.

2. In its protest, GHE also challenged the agency's failure to respond to
its request to revise its proposal and alleged that Sherman had a
"significant contract advantage" over GHE because of the experience of GHE's
primary counselor. Protest at 3. The protester, however, failed to pursue
these contentions in its comments in response to the agency's explanation of
its actions; we therefore consider them abandoned. See Applied Cos.,
B-279811, July 24, 1998, 98-2 CPD para. 52 at 5 n.5.