TITLE:  Galen Medical Associates, Inc., B-288661.4; B-288661.5, February 25, 2002
BNUMBER:  B-288661.4; B-288661.5
DATE:  February 25, 2002
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Decision

Matter of: Galen Medical Associates, Inc.

File: B-288661.4; B-288661.5

Date: February 25, 2002

Perry Wallace, M.D., for the protester.

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

Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that agency misevaluated proposals and made an improper award
decision is denied where record shows that protester's proposal failed to
meet a material requirement of the solicitation, and therefore was
ineligible for award.

DECISION

Galen Medical Associates, Inc. protests the award of a contract to Dr.
Deborah Downing, MD PLLC under request for proposals (RFP) No. 586-44-01,
issued by the Department of Veterans Affairs (VA) to acquire primary and
preventive medical care and continuity of care services at a clinic in
Meridian, Mississippi, affiliated with the G.V. (Sonny) Montgomery VA
Medical Center in Jackson, Mississippi. Galen asserts that the agency
misevaluated proposals and was biased against Galen.

We deny the protest.

This is Galen's second protest in connection with this acquisition. In
response to Galen's first protest (also alleging various evaluation
improprieties), the VA took corrective action by amending the RFP's
evaluation scheme, soliciting and evaluating revised proposals and making a
new source selection determination. (After being advised of the corrective
action, we dismissed Galen's protest as academic.)

In response to the original solicitation, the VA received three proposals,
including Galen's and Dr. Downing's. In implementing its corrective action,
the agency permitted all three firms to submit proposal revisions. After
receiving and evaluating the revised proposals, the agency made award to Dr.
Downing without further discussions (the agency had conducted discussions
under the original RFP), finding that Dr. Downing's proposal represented the
best overall value. Galen challenges the new evaluation and award on
numerous grounds, including what it describes as integrity violations and
bias on the part of the agency's contracting officials.

In reviewing protests against a procuring agency's proposal evaluation, we
will consider whether the evaluation was reasonable and consistent with the
terms of the solicitation and applicable statutes and regulations. National
Toxicology Labs, Inc., B-281074.2, Jan. 11, 1999, 99-1 CPD para. 5 at 3. Based
on our review of the record, we conclude that the agency reasonably
determined that Galen's proposal failed to meet a material RFP requirement;
Galen therefore was ineligible for award. In this regard, where a proposal
fails to meet a material solicitation requirement, it cannot properly form
the basis for the award of a contract. Rel-Tek Sys. & Design, Inc.,
B-280463.3, Nov. 25, 1998, 99-1 CPD para. 2 at 3.

The RFP required offerors to provide detailed information regarding the
facility that would be used in performing the contract; specifically, they
were to provide the location of the facility, RFP at 4, and information
sufficient to show that there would be clinical space sufficient to
accommodate the estimated number of patients to be seen, and to meet the
other performance requirements. RFP at 24.

Galen offered two alternative locations for performance of the contract.
Galen's primary location was the current site of the VA medical center
clinic in Meridian, Mississippi (operated by Dr. Downing, the incumbent
contractor). Galen Technical Proposal at 15. Galen's alternate location was
a building that is the present location of Galen's private clinic. Id. at
21. The evaluators determined that neither of Galen's proposed facilities
was adequate to perform the contract. In this regard, the record shows that
Dr. Downing, the incumbent contractor, holds the lease for Galen's primary
location--the facility where the VA medical center clinic in Meridian
currently is located. [1] Downing Technical Proposal at 6. The evaluators
noted that the VA clinic location would not be available unless Dr. Downing
would be willing to surrender the lease to Galen. Agency Technical
Evaluation Memorandum, Dec. 3, 2001, at 1. There was no indication in
Galen's proposal that the firm had arrived at such an arrangement with Dr.
Downing.

The evaluators also concluded that Galen's alternate location would be
inadequate to accommodate the additional patient load that would result from
the contract (approximately 2,800 to 3,000 patients). In this connection,
Galen's proposal stated as follows:

Galen Medical Associates, Inc. d/b/a/ Patient First Urgent Care Clinic is a
Mississippi for profit corporation (formerly Perry Wallace, MD and
Associates) operating as a primary care clinic in Lauderdale County since
1987. It was the single largest solo practice in Meridian, MS with over
8,000 active patients and up to 12,000 patient-visits per year. We have
always had an excellent reputation and have serviced veterans from the
community as well as the Naval Air [S]tation Meridian's active personnel.

We are now associated with Riley-HMA hospital here in Meridian where we will
continue to serve our patients for years to come.

Galen Technical Proposal at 1. Noting that the facility had only 6,500
square feet of space, with only seven exam rooms, and that Galen's private
clinic already was handling approximately 8,000 active patients (with 12,000
patient visits annually) in this facility, the evaluators concluded that the
facility lacked sufficient space to perform as required. Agency Technical
Evaluation Memorandum, Dec. 3, 2001, at 1. On the basis that Galen did not
have an adequate facility (as well as a concern relating to the availability
of proposed personnel), the VA concluded that "the proposal does not
document that [Galen] has the physical facilities or the staff that would be
necessary to provide services under the contract." Id. We interpret the
evaluators' comments to mean that the agency found Galen's proposal
technically unacceptable.

Galen does not dispute that the facility where the VA clinic is currently
located is not available, but asserts that the evaluators misinterpreted its
proposal with respect to the patient workload at its alternate facility.
According to the protester, its proposal provides information relating to
the patient workload of a predecessor entity, Perry Wallace MD and
Associates. Galen maintains that this information was provided only to
demonstrate that Dr. Wallace (the primary physician proposed by the
protester) had experience in managing large patient populations in the past,
and not to represent the firm's current patient workload. Galen concludes
that the agency unreasonably found that its alternate facility was
inadequate.

We find that the agency reasonably interpreted Galen's proposal. Offerors
are responsible for submitting an adequately written proposal. Carlson
Wagonlit Travel, B-287016, Mar. 6, 2001, 2001 CPD para. 49 at 3. As quoted
above, the proposal specifically referred to a patient population of 8,000
at the facility, with 12,000 patient visits, and went on to state that "[w]e
are now associated with Riley-HMA hospital here in Meridian where we will
continue to serve our patients for years to come." Notwithstanding Galen's
protest position, it was entirely reasonable for the agency to conclude from
this language that Galen's facility was currently handling a large number of
private patients and, since the proposal did not state otherwise, that it
would continue to do so even if Galen were awarded the contract here. While
in its protest Galen suggests that the agency misinterpreted its proposal on
the question of the patient population being served, it neither denies that
it currently is serving a large patient population at its facility, nor
provides patient numbers that it claims are more accurate; more
fundamentally, Galen does not dispute the agency's conclusion that the
facility would be inadequate to handle the patients that would be added
under the VA contract in question. Consequently, we conclude that agency
reasonably determined that Galen failed to propose an acceptable facility--a
material RFP requirement-and thus its proposal was technically unacceptable.

Galen asserts that the agency improperly failed to bring the inadequacy of
its proposed facilities to its attention through discussions. However, we
need not address this allegation, since there is no evidence of prejudice.
In this regard, as noted, the record shows that Galen's primary facility is
unavailable because the awardee holds the lease for that location;
discussions would not have changed this. As for the second location, as
discussed above, Galen has submitted no argument or evidence to show that
the agency's conclusions relating to the adequacy of that facility were
erroneous or unreasonable, and has not asserted or demonstrated that it
would have offered another alternate location had it been advised of the
agency's conclusions during discussions. Thus, there is no basis for finding
that discussions would have resulted in any change in Galen's alternate
location. We conclude that Galen was not prejudiced by the agency's alleged
failure to engage in discussions. See Statistica, Inc. v. Christopher, 103
F.3d 1577, 1581 (Fed. Cir. 1996); Metropolitan Interpreters & Translators,
B-285394.2 et al., Dec. 1, 2000, 2001 CPD para. 97 at 9 (protest will not be
sustained where record shows that alleged failure to engage in meaningful
discussions was not prejudicial to protester).

As noted, Galen alleges integrity violations on the part of the agency,
including conflicts of interest and bias in favor of the awardee and against
Galen. We dismiss these assertions as academic since, even if Galen were
correct, the firm would be ineligible for award for reasons independent of
the agency's actions. In this regard, Galen's proposal was ineligible for
award because it failed to offer a facility adequate to meet the
requirements of the RFP; it was Galen's actions in preparing its proposal,
and not any action on the part of the agency, that led to its proposal being
ineligible for award. [2]

Galen also challenges the acceptability of Dr. Downing's proposal on several
grounds. Galen is not an interested party to raise these arguments. Under
our Bid Protest Regulations, 4 C.F.R. sect. 21.0(a) (2001), a firm must have a
direct economic interest in the award or failure to award a contract in
order to have standing to maintain a protest argument. Here, there was a
third offeror whose proposal the agency determined was at least technically
acceptable, and Galen does not challenge that determination. Accordingly,
even if we found Dr. Downing ineligible for award for one of the reasons
advanced by Galen, the third offeror, not Galen, would move into line for
award. Under these circumstances, Galen lacks a direct economic interest in
this aspect of its protest, and thus is not an interested party for purposes
of challenging the acceptability of Dr. Downing's proposal. OMV Med., Inc.;
Saratoga Med. Ctr., Inc., B-281387, et al., Feb. 3, 1999, 99-1 CPD para. 52 at
9-10.

As a final matter, Galen asserts that the agency improperly failed to
execute a determination and finding to continue performance of the contract
notwithstanding Galen's protest, and that it therefore should be reimbursed
both its bid protest and proposal preparation costs. However, since we have
concluded that Galen's offer was not eligible for award, Galen suffered no
prejudice as a consequence of the agency's failure, and this failure
therefore would not provide a basis for sustaining Galen's protest.
Balantine's S. Bay Caterers, Inc., B-250223, Jan. 13, 1993, 93-1 CPD para. 39 at
7-8. It follows that there is no basis for us to recommend payment of
protest or proposal preparation costs. 4 C.F.R. sect. 21.8(d).

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. Galen proposed the current VA clinic facility, as stated in its proposal,
with the "understanding that the leasing of the building is controlled
exclusively by the VA contract." Galen Technical Proposal at 15. The record
does not support Galen's understanding. The owner of the facility is a
private concern, Meridian HMA/Riley Hospital, and the current lease was
entered into between Meridian and Dr. Downing, with no involvement by the
VA. Downing Technical Proposal at 6.

2. Galen also challenges the agency's amending the RFP (in implementing its
corrective action) to change the relative weights of the evaluation
criteria. However, since its proposal was ineligible for award based on its
failure to meet a material solicitation requirement, Galen was not
prejudiced; its proposal would have been unacceptable under either the prior
or current scheme.