TITLE:  PGBA, LLC, B-292679.2; B-292679.3, November 17, 2003
BNUMBER:  B-292679.2; B-292679.3
DATE:  November 17, 2003
**********************************************************************
   Decision

   Matter of:   PGBA, LLC

   File:            B-292679.2; B-292679.3

   Date:              November 17, 2003

   Kathleen E. Karelis, Esq., W. Jay DeVecchio, Esq., Robert K. Huffman,
Esq.,

   Lisanne S. Cottington, Esq., Edward Jackson, Esq., Kimberly R. Heifetz,
Esq.,

   Jeffrey C. Walker, Esq., and Alexa Zevitas, Esq., Miller & Chevalier, for
the protester.

   Steven S. Diamond, Esq., Walter F. Zenner, Esq., Marc A. Stanislawcyzk,
Esq.,

   W. Susanne Addy, Esq., and Joseph M. Catoe, Esq., Arnold & Porter, for
Wisconsin Physicians Service Insurance Corporation, an intervenor.

   Ellen C. Bonner, Esq., and Michael E. Jonasson, Esq., Department of
Defense, Tricare Management Agency, for the agency.

   Glenn G. Wolcott, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1.  Protest that awardee intends to improperly access proprietary Medicare
information in performing claims processing function for Department of
Defense (DOD) health care beneficiaries is denied where record shows that,
rather than access Medicare databases, the awardee proposed to train its
staff regarding Medicare requirements, coordinate communication with
Medicare contractors and health care providers, and act as advocates for
the DOD health care beneficiaries. 2.  Where contract performance requires
coordination of benefits available under both Medicare and DOD health care
programs, and solicitation advised that proposals would be evaluated
regarding the effectiveness of proposed approaches to timely and
accurately resolve claims, offerors were reasonably on notice that the
agency would consider the extent of an offeror's knowledge and experience
regarding the Medicare program. 3.  Agency reasonably concluded that
protester's proposal to provide "one-on-one" assistance too a limited
number of beneficiaries--selected on the basis of their status as "VIP
beneficiaries," by virtue of a high call frequency, or due to having
submitted a high volume of claims--did not provide the depth of service
reflected in awardee's proposed approach to employ higher staffing levels
of trained personnel to function as advocates for DOD beneficiaries. 4. 
Agency reasonably evaluated awardee's proposal regarding transitioning
requirements as superior to protester's proposal, notwithstanding
protester's incumbent status, where requirements of contract being
competed have significant differences from prior contract requirements and
awardee's proposal contained a detailed discussion of those new
requirements, discussed anticipated risks, problems and potential
disruptions, and identified potential strategies and solutions. 5.  Agency
reasonably evaluated awardee's proposal as superior to protester's
regarding data access where awardee proposed to provide access to all
points designated in the solicitation, identified two additional points
where data access would be provided, and proposed to host semi-annual,
customer focused, "discovery meetings" with government representatives to
identify and discuss data access issues. 6.  In evaluating protester's
past performance, agency reasonably relied on content of performance
reports that had been previously disclosed to, and discussed with
protester, and for which protester had previously provided written
comments; agency was not required to present the previously discussed
information with protester again during discussions.

   DECISION

   PGBA, LLC protests the Department of Defense (DOD), Tricare Management
Agency's (TMA) award of a contract to Wisconsin Physicians Service
Insurance Corporation (WPS) under request for proposals (RFP) No.
MDA906-02-R-0007.  This solicitation sought proposals to provide health
care claims processing and related services for military members, and
their dependents, who are eligible for both Medicare and Tricare
benefits.  PGBA protests that the agency erred in evaluating proposals
under various technical subfactors, failed to properly evaluate the
offerors' past performance, failed to conduct meaningful discussions, and
failed to perform an appropriate price/technical tradeoff.

   We deny the protest.

   BACKGROUND

   DOD provides health care to active-duty and retired members of the seven
uniformed services, and to their dependents, through an extensive network
of military treatment facilities (MTFs), supplemented by a network of
civilian health care providers operating under managed care support (MCS)
contracts with DOD.  In the early 1990s, DOD implemented the Tricare
program, which provides three basic health care options:  a managed care
program, a preferred-provider option, and a fee-for-service option.  The
total number of beneficiaries currently eligible for Tricare coverage is
approximately 8.7 million.  A portion of these beneficiaries
(approximately 1.5 million) is also entitled to receive Medicare benefits
due to their age (65 or older) or poor health; this portion of the
beneficiary population is generally referred to as "dual eligible"
beneficiaries.

   Prior to October 2001, Tricare beneficiaries who became eligible for
Medicare lost their eligibility for Tricare coverage.  Effective October
2001, Congress enacted legislation, commonly referred to as "Tricare for
Life" (TFL), which restored Tricare coverage for Tricare beneficiaries who
are also eligible for Medicare.  Under the statutory scheme, Medicare
coverage is primary and Tricare coverage is secondary.[1] 

   In response to the TFL legislation, DOD modified the then-ongoing MCS
contracts to incorporate claims processing services for the dual eligible
beneficiary population.  Pursuant to these modifications, PGBA, acting as
a subcontractor to several MCS prime contractors, has been processing the
majority of the dual eligible beneficiary claims; WPS, acting as a
subcontractor to one MCS prime contractor, has been processing the
remaining such claims.       

   The prior MCS contracts have expired or will expire soon, and have been or
will be replaced by the "next generation" of Tricare contracts, frequently
referred to as "T-Nex" contracts.  In replacing the expiring contracts,
and as a part of a broader transformation of DOD's military health care
system, DOD has made various program changes, including consolidation of
its current eleven Tricare regions into three regions.  Further, unlike
the prior MCS contracts that incorporated various unique services
performed by specialized subcontractors, DOD has elected to "carve out"
such services for separate, nationwide contracts.  The contract at issue
here, which requires performance of claims processing services for the
"dual eligible" beneficiary population (generally referred to as the
"Tricare Dual Eligible Fiscal Intermediary Contract" or "TDEFIC") is one
such contract.          

   The TDEFIC solicitation was issued in September 2002 and sought proposals
for a fixed-unit-priced requirements contract for a base period and five
option periods.  Agency Report, Tab 1, at 28.  Among other things, the
statement of work (SOW) calls for the successful offeror to timely and
accurately verify beneficiary eligibility; adjudicate, process and pay
beneficiaries' claims; accurately coordinate benefits available under
Tricare and Medicare; correctly apply deductibles, caps and co-payments;
and furnish the beneficiaries with explanations of the benefits provided. 
agency Report, Tab 1, at 19-25. 

   Section M of the solicitation provided that source selection would be
based on the proposal offering the best overall value to the government
and identified the following, equally weighted, evaluation
factors--technical merit, past performance, and price--reminding offerors
that the non-price factors combined were "significantly more important"
than price.  Agency Report, Tab 1, at 493. 

   With regard to technical merit, the solicitation established the following
equally weighted subfactors:  claims processing, beneficiary/provider
satisfaction, management approach, transition in, and data access.  Id. 
The solicitation also provided that technical proposals would be evaluated
on the basis of how well the proposed procedures or methods "meet or
exceed the Government's minimum requirement[s]"; offerors were advised
that the agency would consider proposed enhancements exceeding the RFP's
stated requirements, provided enhancements were clearly described, and
offered--in the agency's judgment--"added benefit" to the government. 
Agency Report, Tab 1, at 493-94.[2]  

   With regard to past performance, the solicitation directed that:

   [t]he offeror . . . shall submit a past performance report . . . for each
of their current top five overall accounts based on gross revenues.  The
offeror shall not include accounts from their own subsidiaries . . . or
other team members.

   *     *     *    *    *

   If the offeror . . . w[as] formed for the purposes of proposing on this
RFP and any of the parent corporations have relevant experience, the
offeror shall submit their top five account information on its parent

   organizations.  The offeror must document how the parent corporation's
past performance is relevant to this solicitation.[[3] ]

   Agency Report, Tab 1, at 480.   

   Finally, with regard to price proposals, each offeror was required to
propose, by contract period, fixed claims processing rates (separate rates
for electronic and paper claims), a fixed price for administration, and
fixed prices for transitioning in and transitioning out.  Section B of the
RFP provided estimated quantities, by contract period, regarding
electronic and paper claims; section M of the
RFP advised the offerors that the evaluated price for claims processing
for each period would be calculated by multiplying the proposed rates by
the corresponding volume estimates and that the offeror's total price
would be calculated by summing the evaluated prices for each contract
period.  Agency Report, Tab 1, at 496.

   The agency received initial proposals from PGBA, WPS and a third offeror
by the February 12, 2003 closing date.[4]  Each offeror subsequently made
an oral presentation to the agency, relying on slides provided to the
agency with the offeror's written proposal. 

   WPS's proposed approach contemplated significantly higher staffing levels
than the staffing levels associated with PGBA's proposed approach.[5] 
Agency Report, Tab 16, at 38; Tab 10, at 141-54.  Further, WPS's proposal
provided that WPS personnel would receive significant training regarding
the Medicare program and emphasized that WPS staff would act as
"advocates" for the Tricare beneficiaries, taking the lead in coordinating
communication between the beneficiaries, health care providers, Medicare
contractors, and other health insurance carriers.  Agency Report, Tab 11,
atA 109, 126, 138, 143, 165.  The agency's source selection evaluation
team (SSET) viewed WPS's advocacy approach, along with the proposed
training and higher staffing levels necessary to support that approach, as
a proposal strength that exceeded the solicitation's requirements. 
Specifically, the SSET stated:  "WPS' proposal to train customer service
staff on Medicare benefits and to allow their customer service staff to
deal with Medicare and [MCS] contractors on claims issues should increase
beneficiary satisfaction."  Agency Report, Tab 46, at 256.  The SSET
evaluated WPS's initial proposal as "blue/exceptional," with low proposal
risk, under four of the five technical evaluation subfactors, noting that,
overall, the proposal "was extremely comprehensive" and "exceeded RFP
requirements in many aspects."  Agency Report, Tab 43, at 208. 

   In contrast, the SSET evaluated PGBA's initial proposal as
"yellow/marginal" under four of the five technical subfactors, stating: 
"the PGBA technical proposal was characterized by a number of omissions
which gave the impression that there had been a lack of attention to
detail."[6]  Agency Report, Tab 43, at 206.

   In evaluating initial proposals under the past performance factor, the
performance risk assessment group (PRAG) assigned both PGBA's and WPS's
proposals adjectival ratings of "confidence."[7]  However, with regard to
PGBA's proposal, the PRAG report stated:  "reservations exist as to
[PGBA's] ability to perform the required effort without significant
government oversight."  Agency Report, Tab 22, at 98.  In contrast, the
PRAG report stated:  "The PRAG is confident WPS can accomplish the
required effort with minimal government oversight."  Agency Report, Tab
23, at 103.  Consistent with the PRAG report, at a hearing conducted by
GAO in connection with this protest,[8] the PRAG chair testified that
PGBA's rating was on the "lower side," and that WPS's rating was on the
"high side," of the "confidence" rating.  Tr. at 326. 

   The PRAG's past performance ratings were based, in large part, on
consideration of contractor performance evaluations (CPEs) that TMA had
conducted in connection with PGBA's and WPS's subcontract performance of
claims processing activities under the prior MCS contracts, following
enactment of the TFL legislation.  The agency's final CPE reports reflect
significantly more successful performance by WPS than by PGBA.  Agency
Report, Tabs 77, 78.  Specifically, while recognizing that, due to the
complexities involved, PGBA's efforts were "laudable," the CPE reports
concluded that PGBA's actual accomplishments were not.  Overall, TMA
concluded that PGBA "fell short of ensuring an acceptable level of quality
and accuracy" and that "many operation areas require critical
re-evaluation, re-training, and re-thinking of work processes."  Agency
Report, Tab 77, at 4-5, 64-65, 144-45, 202-03.[9]  Among other things, TMA
noted that "millions of dollars in duplicate and incorrect payments were
made" and that, even after PGBA attempted corrective action, "significant
quality and accuracy issues still existed."  Agency Report, Tab 77, at 5,
65, 145, 203.  More specifically, the final CPE reports referenced PGBA's
"overall operational problems," including "inaccurate payment
determinations," "numerous violation[s] of privacy act requirements,"
"unclear, erroneous, or inappropriate letters," "improper aging of certain
types of claims," and "inaccurate or non-existent deferrals for medical
review."  Id.  The reports concluded, "These are the types of problems
that should have been readily evident internally and addressed quickly
[but were not]."  Id.  In contrast, the CPE report regarding WPS's
performance reflected significantly fewer problems and complimented WPS
and HealthNet Federal Services, Inc. (the MCS prime contractor) for
working together to create documentation outlining their implementation of
the TFL legislation.  The report concluded that their efforts "resulted in
a relatively smooth implementation of TFL."[10]  Agency Report, Tab 78, at
258.     

   In evaluating PGBA's past performance, the PRAG also expressed concern
that PGBA had not complied with the solicitation requirement that past
performance information be submitted for the offerors' "top five"
accounts.[11]  The PRAG concluded that PGBA had omitted information for
two of its "top five" accounts,[12] and had, instead, submitted past
performance reports relating to PGBA's parent and sister
corporations--which the PRAG considered to be not only irrelevant, but
contrary to the solicitation directions.[13]  Accordingly, the PRAG
expressed concern with "the inability of PGBA to accurately provide
required information or the intentional omission of harmful
information."[14]  Agency Report, Tab 22, at 100. 

   Based on the evaluation of initial proposals, the agency determined that
each of the three offerors were within the competitive range and that
discussions would be required.  Accordingly, discussions were thereafter
conducted, during which multiple matters requiring correction,
explanation, amplification, or clarification were brought to each
offeror's attention.  Agency Report, Tabs 99, 100. 

   Final proposal revisions (FPRs) were requested and submitted by April 28. 
These FPRs were subsequently evaluated by the SSET.  In addition, all of
the offerors' complete proposals were independently evaluated by TMA's
source selection authority (SSA).  Tr. at 27-33.  In independently
evaluating the proposals, the SSA made no changes to the SSET evaluations
of WPS's proposal.  However, in evaluating PGBA's proposal, the SSA
increased the SSET rating with regard to one technical evaluation
subfactor, data access, from "yellow/marginal" to "green/acceptable." 
Overall, the final agency ratings of PGBA's and WPS's proposals were as
follows:

   +------------------------------------------------------------------------+
|A                           |WPS                  |PGBA                 |
|----------------------------+---------------------+---------------------|
|Technical Merit             |Blue/Exceptional     |Green/Acceptable     |
|                            |                     |                     |
|                            |(low risk)           |(low risk)           |
|----------------------------+---------------------+---------------------|
|  --Claims Processing       |Blue/Exceptional     |Blue/Exceptional     |
|                            |                     |                     |
|                            |(low risk)           |(low risk)           |
|----------------------------+---------------------+---------------------|
|  --Beneficiary/Provider    |Blue/Exceptional     |Blue/Exceptional     |
|                            |                     |                     |
|    Satisfaction            |(low risk)           |(low risk)           |
|----------------------------+---------------------+---------------------|
|  --Management Approach     |Green/Acceptable     |Green/Acceptable     |
|                            |                     |                     |
|                            |(low risk)           |(low risk)           |
|----------------------------+---------------------+---------------------|
|  --Transition In           |Blue/Exceptional     |Green/Acceptable     |
|                            |                     |                     |
|                            |(low risk)           |(low risk)           |
|----------------------------+---------------------+---------------------|
|  --Data Access             |Blue/Exceptional     |Green/Acceptable     |
|                            |                     |                     |
|                            |(low risk)           |(low risk)           |
|----------------------------+---------------------+---------------------|
|Past Performance            |Confidence           |Confidence           |
|----------------------------+---------------------+---------------------|
|Evaluated Price             |$486,918,518         |[deleted]            |
+------------------------------------------------------------------------+

   Agency Report, Tab 18, at 15; Tab 20, at 44.

   Although WPS's and PGBA's proposals were both rated "blue/exceptional,"
with low risk, under the first two technical evaluation subfactors--claims
processing and beneficiary/provider satisfaction--the SSA's source
selection memorandum identifies various aspects of WPS's proposal which
led her to conclude that it was superior under those two evaluation
factors.[15]  Among other things, the SSA referenced WPS's higher staffing
levels and its "personalized approach" to achieve a higher level of
beneficiary/provider satisfaction.  Agency Report, Tab 18, at 20, 25.  The
SSA further documented her conclusions regarding strengths in WPS's
proposal, stating:

   Get back money from Medicare Fiscal Intermediaries/Carriers that shouldn't
have crossed over.

   *     *     *     *     *

   Training customer service staff on Medicare benefits and allowing customer
service staff to deal with Medicare and MCS [contractors] on claims issues
should increase beneficiary satisfaction.

   Will communicate to beneficiaries and providers if their claim was
forwarded to Medicare for processing, rather than simply returning the
claim for filing with Medicare, thus increasing satisfaction and better
informing the beneficiary of the current status of their claim.

   Agency Report, Tab 18, at 19, 20. 

   Similarly, although WPS's and PGBA's proposals received the same
adjectival rating with regard to past performance, the SSA concluded
"there is sufficient difference in WPS' past performance to rank WPS
first."  Agency Report, Tab 18, at 16.  Referring to the TMA-prepared CPEs
documenting WPS's and PGBA's immediately preceding claims processing
performance, the SSA stated:

   PGBA had twice the number of findings (i.e. 34 findings for PGBA and 17
for WPS).[[16]]  For WPS, most of the problems were of limited scope and
had already been recognized by WPS.  In many instances, changes were
implemented by WPS to correct the problems and to preclude the inaccurate
payment of broad categories of claims.  The review performed at PGBA found
systemic inaccuracies as well as individual faults that resulted in broad
categories of overpayments.  PGBA failed to recognize some of the errors
until the TMA review team called them to their attention.  In terms of
both quantities of findings, as well as a delay by PGBA in identifying the
problems, I find WPS' performance to be superior when compared to PGBA as
it relates to the past performance within the category defined by
"Confidence."  WPS ranks the best in terms of past performance.

   Agency Report, Tab 18, at 16-17.   

   The SSA then performed a price/technical tradeoff regarding WPS's and
PGBA's proposals in which she specifically acknowledged the magnitude of
PGBA's price advantage but, nonetheless, concluded, "I have determined the
additional price that will be paid by the Government for WPS to perform
the contract is more than justified by the superior technical performance,
and WPS' outstanding past performance."  Agency Report, Tab 18, at 25. 
Accordingly, a contract was awarded to WPS on July 29.  This protest
followed. 

   DISCUSSION

   PGBA first challenges the agency's evaluation of technical proposals,
identifying alleged evaluation errors regarding the various technical
subfactors.  In short, PGBA maintains the agency improperly credited WPS
with certain technical strengths and/or improperly failed to credit PGBA's
proposal with various technical strengths.  We find no merit in PGBA's
assertions. 

   PGBA first complains that the agency "improperly credited WPS for leverage
of its Medicare contract," complaining that, "to the extent that WPS'
Customer Services staff use Medicare information provided to them by WPS'
Medicare Operation to answer questions of Tricare beneficiaries, WPS could
run afoul of various laws, as well as guidance . . . addressing disclosure
of Medicare information."  Protest at 8, 10.  In short, PGBA maintains
that WPS intends to inappropriately access proprietary Medicare
information in performing the TDEFIC requirements.   

   WPS's proposal made various references to its claims processing experience
under the Medicare program.  Specifically, WPS noted that, in light of the
relationship between Medicare and Tricare benefits under the TFL
legislation,[17] knowledge and understanding of the Medicare program are
valuable in effectively performing the TDEFIC requirements.  In this
regard, WPS's proposal states that WPS is "the largest [Medicare] Part B
administrator in the national program," Agency Report, Tab 11, atA 27, and
repeatedly references the Medicare training WPS intends to provide for its
staff, explaining that WPS staff will initiate and coordinate
communication between the Tricare beneficiaries, the Medicare contractors,
and the health care providers.

   In response to PGBA's protest, both WPS and the agency maintain that
nothing in WPS's proposal suggested, nor did the agency understand WPS's
proposal to assert, that WPS staff would access proprietary Medicare
databases to perform their TDEFIC responsibilities.  Rather, they maintain
that the record clearly shows that the Medicare-related "strengths" that
WPS proposed, and as evaluated by the agency, related to training and/or
experience of WPS staff regarding Medicare benefits and the Medicare
program--not improper access to proprietary data.  Specifically, the
source selection decision memorandum describes the following proposed
"strength" regarding Medicare knowledge:

   Training customer service staff on Medicare benefits and allowing customer
service staff to deal with Medicare and [MCS] contractors on claims issues
should increase beneficiary satisfaction.

   Agency Report, Tab 18, at 20; Tab 20 at 54. 

   Consistent with this, WPS and the agency note that WPS's proposal
repeatedly discussed its proposed proactive approach, under which WPS's
trained staff will work as "advocates" for the Tricare beneficiaries,
stating, for example:  

   Training for our Customer Service staff will focus on becoming an advocate
for the customer.  Customers do not always understand that we are
dependent on the processing and the information given by Medicare.  In
those situations where we are contacted because Medicare denied the claim
or needs additional information, we will contact the appropriate Medicare
contractor on behalf of the customer.

   Agency Report, Tab 11, at 119.

   Similarly, WPS's proposal states:  "With each contact, the customer will
be serviced by a Representative that has gone through six-weeks of
training on Tricare and Medicare," Agency Report, Tab 11, at 126, and
further elaborates:

   The training our Customer Service representatives receive will allow them
to provide advocacy services such as claims payment information, benefit
information, eligibility verification, program information, marketing
material provided by TMA and duplicate explanation of benefits. 

   Agency Report, Tab 11, at 138. 

   Yet again, WPS's proposal states: 

   We will forward all grievances that deal with Medicare contractors to them
with a notification to the customer.  We will be in close contact with the
customer and if they have not received a response from Medicare, we will
work with Medicare on their behalf to resolve the issue.

   Agency Report, Tab 11, at 143.

   The agency and WPS maintain, and we agree, that nothing in these portions
of WPS's proposal suggests that WPS intends to improperly access
proprietary Medicare information in performing the TDEFIC requirements. 
Further, in pursuing this protest, PGBA has not identified any other
portions of WPS's proposal, or the agency evaluation record, that suggests
such an intent.  Accordingly, we find no merit in PGBA's assertion that
WPS's proposal was credited with improper "leverage" of WPS's Medicare
contract.   

   Alternatively, PGBA asserts that it was improper for the agency to
consider the extent of WPS's knowledge of, and/or experience under, the
Medicare program, since such knowledge/experience was not a stated
evaluation factor.  Protester Comments on Agency Report, Oct. 7, 2003, at
5.  We disagree.  

   Although solicitations must inform offerors of the bases on which
proposals will be evaluated, and the evaluation must be based on such
stated factors, a solicitation must also be read as a whole, with meaning
given to every section, specifically including the statement of work. 
Irwin & Leighton, Inc., B-241734, Feb. 25, 1991, 91-1 CPD P 208.  While
evaluation factors must be identified, an agency need not identify every
possible consideration under each stated evaluation factor, provided such
areas of consideration are reasonably related to, or encompassed by, the
stated criteria.  Avogadro Energy Sys., B-244106, Sept. 9, 1991, 91-2 CPD
P 229.

   Here, as noted above, the solicitation directed that offerors would be
responsible for, among other things, accurate coordination of benefits
available under Tricare and Medicare, correct application of deductibles,
caps and co-payments, and furnishing beneficiaries with explanations of
the benefits provided.  Agency Report, Tab 1, atA 19-25, 476-77.  Section
M of the RFP stated that proposals would be evaluated, among other things,
with regard to "the effectiveness of the [offeror's] approach for
providing timely and accurate [claims] processing," and "the offeror's
ability to establish and maintain beneficiary and provider satisfaction at
the highest level." 

   In light of the these solicitation provisions alone, we believe the
agency's consideration of an offeror's knowledge or experience with the
Medicare program was reasonably subsumed in the stated evaluation
factors.  In any event, given the relationship between the Medicare and
Tricare programs following enactment of the TFL legislation, along with
the potential to minimize a "ping-pong" effect, where claims go back and
forth between the two programs, the agency's consideration of an offeror's
knowledge and/or experience regarding benefits provided and processes
employed under each program was clearly related to and encompassed within
the solicitation's various evaluation factors.  Accordingly, we find no
merit in PGBA's assertion that the agency improperly considered the
knowledge that WPS staff would possess, either through training or
experience, regarding the Medicare program or that the evaluation of this
information was inconsistent with the stated evaluation criteria. 

   PGBA also complains that, to the extent WPS's proposal was credited for
its approach to act as an advocate for Tricare beneficiaries, the agency
erred in not similarly crediting PGBA's proposal for a similar approach. 
Specifically, PGBA maintains that it also proposed to provide "an
additional level of dedicated customer service by identifying TDEFIC
beneficiaries who require one-on-one assistance," and "will make frequent
proactive contact with their beneficiaries to assist with any
TDEFIC-related issues."  Protester Comments on Agency Report, Oct. 7,
2003, at 23; Agency Report, Tab 5, at 224-26. 

   In conducting discussions with PGBA, the agency noted PGBA's proposal to
provide "one-on-one assistance," specifically questioning PGBA regarding
the extent of its commitment and requesting information regarding the
number of beneficiaries this was expected to involve.  Agency Report, Tab
100, at 55-56.  During discussions, PGBA's representative responded to
these requests, stating:  "I don't have an estimate right here with me. 
Certainly [can] provide that later on."  Agency Report, Tab 100, at 57. 
In its FPR, PGBA did, in fact, provide a response, stating that this
aspect of its proposal would "concurrently support up to 300
beneficiaries."[18]  Agency Report, Tab 10, at 51.  PGBA further clarified
that the "up to 300 beneficiaries" selected for "one-on-one assistance"
would be chosen based on their status as "VIP Beneficiaries,"[19] by
virtue of a high frequency of calls, or due to having submitted a high
volume of claims.  Id.   

   In contrast, WPS did not narrowly limit its proposed advocacy to "VIP
Beneficiaries," frequent callers, or those submitting a high volume of
claims; nor did WPS suggest that its advocacy would be limited to a
maximum of 300 beneficiaries at any given time.  Rather, WPS's proposal
provided that all of its customer service representatives would receive
significant training focused on advocacy for the "dual eligible"
population, and proposed sufficiently high staffing levels to accommodate
a greater level of personal interaction with the beneficiary community. 
On this record, we find no basis to question the agency's determination
that WPS's proposed approach, supported by more extensive training and
higher staffing levels, offered a greater depth of service, more personal
interaction, and increased advocacy for the "dual eligible" beneficiary
population (which, the agency notes, is the oldest and frailest portion of
the total Tricare beneficiary population) than the approach offered by
PGBA, and that WPS's approach constituted a material benefit to the
government.

   PGBA next protests that the agency "erroneously credited WPS with
potential costs savings that are unauthorized," complaining that WPS had
proposed, and/or the SSA construed WPS as proposing, to recoup erroneous
Tricare payments to beneficiaries from the Medicare Trust Fund.  PGBA
notes that "nothing . . . permits WPS to withdraw funds [from the Medicare
Trust Fund] to reimburse Tricare."  Protest at 11.

   As noted above, beneficiaries must, generally, submit claims to Medicare
for consideration prior to seeking additional recovery from Tricare. 
After processing a claim for Medicare benefits, the Medicare contractor
forwards dual-eligible beneficiary claims to the Tricare contractor for
processing.[20]  A claim forwarded to the Tricare contractor by Medicare
is known as a "crossover claim," and the Medicare contractor charges the
Tricare contractor a fee for the administrative service of forwarding the
claim, which is known as a "crossover fee."  The Tricare contractor
receives reimbursement from TMA for the crossover fees charged by the
Medicare contractor.

   Some of the "crossover claims" forwarded by Medicare contractors to
Tricare contractors have been erroneously sent due to various errors on
the part of the Medicare contractor.  Referring to such erroneously
transferred claims, WPS's proposal stated that "TMA shouldn't pay for
these claims" and provided that WPS intended to negotiate agreements with
the Medicare contractors "to recover charges on claims that should not
have been crossed over."  Agency Report, Tab 11, at 66.  The agency
evaluated this as a strength in WPS's proposal, noting in the source
selection decision memorandum that "[WPS proposes] to get money back from
Medicare Fiscal Intermediaries for claims that should not have crossed
over when the benefit is a Medicare benefit but is not a Tricare
benefit."  Agency Report, Tab 18, atA 13. 

   PGBA argues that this portion of WPS's proposal, and the agency's
evaluation record, reflect WPS's intent, and/or the agency's understanding
that WPS intended, to recover erroneous beneficiary payments from the
Medicare Trust Fund.  Protester Comments on Agency Report, Oct. 7, 2003,
at 13.

   At the GAO hearing, the SSA provided testimony regarding this issue,
specifically testifying as follows:

   I identified [as a distinguishing strength of WPS's proposal] that they
[WPS] could get money back from Medicare, fiscal intermediary carriers for
claims that shouldn't have crossed over.  And when I say get money back,
we are talking about the crossover fees, not talking about benefit
dollars, but crossover fees that are represented by those crossover
claims. 

   Tr. at 54. 

   Based on our review of the entire record, we find no evidence that
reasonably refutes the SSA's testimony.  We conclude that WPS proposed to
recover crossover fees, and that the SSA understood the WPS proposal to be
addressing only crossover fees.  Accordingly, we find no merit in PGBA's
assertion that WPS intended to recover beneficiary payments from the
Medicare Trust Fund. 

   Next, PGBA protests that the agency's evaluation with regard to the
technical subfactor, transition in, was unreasonable.[21]  Specifically,
PGBA maintains that, because PGBA has been performing more than 80 percent
of the "dual eligible" claims under the prior MCS contracts,[22] it was
"absurd" for the agency to evaluate PGBA's proposal as "green/acceptable"
and WPS's proposal as "blue/exceptional under this subfactor."  Protest at
14.  PGBA's protest in this regard is based on the premise that PGBA has
already "completed" transition tasks relating to 82 percent of the new
contract's requirements, and that transition tasks will be "minimal" since
they will "involv[e] only 18% of the work."  Id. 

   The agency responds that, contrary to PGBA's assumption that transition
tasks related to the claims processing it has been performing under the
prior MCS contracts are "completed," the TDEFIC solicitation reflected a
significant number of changes--affecting all claims processing--that will
require the TDEFIC contractor to alter various aspects of its contract
performance, even with regard to claims processing it has been performing
under the MCS contracts.  Accordingly, the agency states that, while
PGBA's proposal--based on the premise that "most" of the transitioning
requirements were "completed" and only "minimal" efforts would be
required--minimally complied with the solicitations transitioning
requirements, it offered nothing more.

   With regard to changes between the TDEFIC's new requirements and the
offerors' prior activities, the agency notes that, in addition to changing
the basic contract relationship from that of an MCS subcontractor to a
prime contractor relationship with TMA, negotiating new memoranda of
understanding with the new T-Nex MCS contractors, adding the portion of
claims processing not previously performed,[23] the TDEFIC contract
contemplates implementation of system-wide automation changes, including
changes to the payment system (generally referred to as the "TEDS" or
"Tricare encounter data system") as well as to the automated system used
to measure beneficiary eligibility (generally referred to as the new
"DEERS" or "Defense enrollment and eligibility reporting system").  At the
GAO hearing, Tricare's program manager responsible for implementing the
new systems testified that the new DEERS system, alone, will add at least
75 to 100 new data elements to the existing system, will fundamentally
change how contractors access data from and interface with Tricare
beneficiary databases, and that implementation of the new system will
involve modifications to contractors' existing systems and interfaces with
Tricare systems that will require significant programming, testing and
benchmarking.  Tr.A at 552-88. 

   PGBA's own witness, whom PGBA presented as being knowledgeable with regard
to both information technology and the solicitation's transition
requirements, acknowledged that the work associated with establishing
interfaces between PGBA's existing/remaining systems and the new DEERS was
significant.  Specifically, she testified:

   There are certain pieces of data that must be checked against DEERS every
step of the way throughout claims processing.  Half of the work involves
analysis of those [existing] systems themselves in order to understand
where those interfaces must be, where they must be unhooked, and hooked
into a new interface . . .  and [we] have spent in excess of 13,000 hours
doing [that] since the 1st of January [2003].

   Tr. at 624.

   With regard to the other "half of the equation," that is, analysis of the
new DEERS, this witness further testified that, until PGBA personnel
received more information, they did not feel "comfortable" establishing a
detailed transition plan related to implementation of the new system.  Tr.
at 623, 626.  Overall, consistent with PGBA's  discomfort in addressing
the new DEERS requirements and its assumption that transition efforts
would be minimal, the agency concluded that PGBA's proposal met, but did
not exceed, the solicitation requirements regarding transitioning. 

   In contrast, WPS's proposal presented a transition plan that the agency
viewed as significantly exceeding the solicitation requirements.  In terms
of detail, WPS's proposal contained 68 pages of annotated slides and a
supplemental detailed plan that addressed how it intended to meet the
transition requirements.  Agency Report, Tab 11, at 220-87.  The proposal
identified and described 53 phased milestones, along with listing and
describing all required tasks and timelines.  Id. at 230.  The plan showed
the sequencing of the milestone tasks, which were annotated with
appropriate "plan start" and "plan finish" dates.  Id. at 231, 236, 238,
252, 277, 278.  WPS also submitted a detailed phase-in plan.  Id. at
354-500.  These 155 pages displayed 1,302 sequenced tasks that WPS plans
to follow to effect the transition.  Finally, WPS's proposal addressed
potential risks and problem areas and formulated specific solutions, in
particular identifying potential disruptions in service to beneficiaries
and providers and identifying proposed strategies to minimize their
effect.  Id. at 257-61.  Overall, the agency found WPS's proposal to be
comprehensive, detailed and proactive, and concluded that WPS's proactive
approach exceeded the solicitation requirements.  Agency Report, Tab 31,
at 131.  Accordingly, the agency rated WPS's proposal blue/exceptional.

   In reviewing an agency's evaluation, GAO will not reevaluate offerors'
proposals, but rather will examine the agency's evaluation to ensure that
it was reasonable and consistent with the solicitation's stated evaluation
criteria and with procurement statutes and regulations.  Encorp-Samcrete
Joint Venture, B-284171, B-284171.2, Mar.A 2, 2000, 2000 CPD P 55 at 4.
The offeror has the burden of submitting a proposal that meets or exceeds
the solicitation requirements, and mere disagreement with an agency's
judgments regarding these matters is insufficient to establish that the
agency acted unreasonably.  PEMCO World Air Servs., B-284240.3 et al.,
Mar. 27, 2000, 2000 CPD P 71 at 15.

   Based on the record here we find no basis to question the agency
evaluation of WPS's and PGBA's proposals with regard to the requirements
for transitioning from the preceding MCS subcontracts to performing the
TDEFIC requirements.  The record establishes that there were significant
aspects of the TDEFIC requirements that differed from the prior MCS
contracts, thus requiring significant transition efforts--even for an
incumbent contractor, and the record reasonably supports the agency's
conclusion that WPS's proposal was significantly superior to PGBA's with
regard to addressing the transition efforts that would be required. 
Accordingly, PGBA's protest that the agency unreasonably evaluated the
offerors' proposals with regard to the transition requirement--including
the assertion that PGBA's transition tasks would be "minimal"--is without
merit.

   PGBA next challenges the agency evaluation with regard to the technical
subfactor for data access.  As noted above, the final agency evaluation of
PGBA's proposal with regard to this subfactor was "green/acceptable,"
while WPS's proposal was rated "blue/exceptional."  PGBA complains that
the agency erred in failing to rate its proposal "blue/exceptional."

   With regard to data access, the RFP contained the following requirements:

   The contractor shall . . . [provide] timely and reliable electronic access
for Government-designated individuals.  Minimum access shall include two
authorizations at each MTF [military treatment facility], ten
authorizations at each Surgeon General's Office, two authorizations at
Health Affairs, two authorizations at TMA-Washington, two authorizations
at TMA-Aurora, and authorization(s) (not to exceed two) for on-site
Government representatives.  Access requires ongoing user training and
support. . . .

   Agency Report, Tab 1, at 22. 

   The agency was concerned that PGBA's initial proposal did not adequately
address the level and type of data access that would be provided.  During
discussions, the agency asked PGBA several specific questions regarding
this matter.  Agency Report, Tab 100, at 62-69.  In its FPR, PGBA stated: 

   It is up to the Government to determine which employees/agencies have
[data] access . . . and PGBA will support your needs. 

   PGBA will initially support access for up to 200 users. . . .  Should the
Government desire additional access rights, PGBA will work to accommodate
the request.    

   Agency Report, Tab 10, at 58.

   In evaluating PGBA's FPR, the agency concluded that PGBA met, but did not
exceed, the solicitation's data access requirements, thereby warranting a
"green/acceptable" rating. 

   Similar to PGBA's FPR, WPS's proposal provided that WPS would meet the
solicitations requirements by providing data access to all of the
specifically designated points identified in the solicitation.  Agency
Report, Tab 11, at 293.  In addition to those specifically designated
access points, WPS also proposed to provide data access to regional
directors and intermediate services commands.  Id.  The agency viewed
WPS's identification of these additional data access points as
demonstrating a clear understanding of the contract requirements and
evaluated this aspect of WPS's proposal as exceeding solicitation
requirements in a manner that benefited the government.  Additionally, WPS
proposed to host "semi-annual discovery meetings with government
representatives" in order to "address the usability of the existing tools,
define desired enhancements and plan deliverables," further explaining
that "[w]orking together we will be able to refine the portals, reports
and query capabilities."  Agency Report, Tab 11, at 310.  Again, the
agency viewed this proposed customer-oriented approach as exceeding the
solicitation requirements in a way that benefited the government. 
Specifically, with regard to the "discovery meetings," one evaluator
noted:  "The fact that WPS offers to host semi-annual discovery meetings
with government partners demonstrates their willingness to furnish ongoing
customer support tailored to user needs that may evolve over the course of
the contract."  Agency Report, Tab 51, at 179.     

   As noted above, a protester's mere disagreement with the agency's judgment
does not establish that the agency acted unreasonably.  PEMCO World Air
Servs., supra.  Based on the record here, it is clear that PGBA's FPR
revision, while meeting the solicitation requirements made no attempt to
exceed those requirements.[24]  In contrast, WPS's proposal did--and did
so in a way which the agency viewed as providing a benefit.  We find no
basis to question the reasonableness of the agency's conclusions in this
regard. 

   Next, PGBA protests the agency's evaluation regarding PGBA's past
performance.  As discussed above, the solicitation established that the
agency would accord an offeror's past performance the same weight given to
all five technical subfactors combined.  Agency Report, Tab 1, at, 493. 
As also discussed above, the agency's past performance evaluation relied
significantly on the information contained in the CPE evaluation reports
which TMA completed in October 2002 and which were significantly more
critical of PGBA's performance in performing claims processing for dual
eligible beneficiaries under the prior MCS contracts. 

   In challenging the agency's evaluation of past performance, PGBA has not
presented any argument or information that materially challenges the
factual accuracy of the CPE reports.  Indeed, PGBA acknowledges that the
problems associated with PGBA's prior performance, as documented in the
CPE reports, "were to be expected given the task confronting PGBA." 
Protester's Comments on Agency Report, Oct. 7, 2003, at 28.  PGBA
essentially maintains that the agency failed to consider the CPE reports
in proper perspective, and specifically complains that, in comparing
PGBA's performance to that of WPS, the agency failed to consider that PGBA
was responsible for implementing a significantly greater volume of
claims.  Id. at 26.   

   The agency points out that the sample size of claims from which the CPE
reports drew their findings were the same for both WPS and PGBA. 
Accordingly, to the extent PGBA criticizes the agency's consideration of
the quantity of problems identified in each of the reports, the agency
maintains that such consideration was appropriate.  Cf. Green Valley
Transport., Inc., B-285283, Aug. 9, 2000, 2000 CPD PA 133 (unreasonable
for an agency to consider the absolute number of negative performance
actions regarding an offeror without considering that number in the
context of the total volume from which the number was drawn). 

   We agree.  Since the sample size of claims from which problems were
identified was the same for both PGBA and WPS, the agency's consideration
of the number of problems identified within those samples was reasonable. 
More significantly, the agency's evaluation record establishes that, in
addition to considering the relative number of problems, the SSA
specifically considered the nature and significance of WPS's and PGBA's
respective problems, along with the offerors' responses to them. 
Specifically, the source selection decision memorandum states:

   For WPS, most of the problems were of limited scope and had already been
recognized by WPS.  In many instances, changes were implemented by WPS to
correct the problems and to preclude the inaccurate payment of broad
categories of claims.  The review performed at PGBA found systemic
inaccuracies as well as individual faults that resulted in broad
categories of overpayments.  PGBA failed to recognize some of the errors
until the TMA review team called them to their attention. 

   Agency Report, Tab 18, at 17.  

   On this record, we find no basis to question the agency's determination
that WPS's past performance with regard to the claims processing for dual
eligible beneficiaries was superior to that of PGBA.

   PGBA also asserts that the agency was required to specifically discuss the
content of the CPE reports with PGBA during the discussions TMA conducted
in connection with the TDEFIC procurement.  We disagree. 

   The Federal Acquisition Regulation (FAR) provides that an agency must
discuss "adverse past performance information to which the offeror has not
yet had an opportunity to respond."  FAR S15.306(d)(3).  Here, the record
is clear that TMA specifically presented the draft CPE reports to PGBA at
the time the evaluations were being conducted, that PGBA submitted written
responses to TMA regarding the content of those reports, that TMA
considered those responses and, in some instances, incorporated them into
the final reports.  To the extent PGBA asserts that TMA was required, in
the context of the TDEFIC solicitation, to repeat that process, we reject
the assertion.[25]  Accordingly, we find no merit in PGBA's protest that
the agency's evaluation of PGBA's past performance was flawed.[26]   

   Finally, PGBA asserts that the SSA failed to perform a reasoned
price/technical tradeoff, arguing that the record reflects an inadequate
discussion of the qualitative distinctions between the two proposals.  We
disagree.

   The propriety of a procuring agency's source selection decision turns, not
on whether this Office agrees with the source selection official's
judgment, but on whether that judgment is reasonable and is adequately
documented.  Cygnus Corp., B-275181, Jan. 29, 1997, 97-1 CPD P 63 at 11. 
While adjectival ratings and point scores are useful guides, they
generally are not controlling; rather, a price/technical tradeoff decision
must be supported by documentation addressing the relative differences
between proposals, their strengths, weaknesses and risks.  Century Envtl.
Hygiene, Inc., B-279378, June 5, 1998, 98-1 CPD P 164 at 4.

   Here, as discussed above, the solicitation advised offerors that, in
making the source selection decision, past performance and the five
technical evaluation subfactors combined would be "significantly more
important than price."  Accordingly, the SSA was obligated to give WPS's
evaluated advantages with regard to the non-price factors significantly
more weight than PGBA's price advantage.  As discussed above, the
evaluation record provides ample support for distinguishing between WPS's
and PGBA's track records of past performance with regard to claims
processing for dual eligible beneficiaries.  Further, the record supports
the agency conclusion that WPS's proposed approach, which contemplates
higher staffing levels and more extensive training, will provide more
personal interaction and greater support for the "dual eligible"
population--the oldest and frailest portion of DOD's beneficiary
population.  Finally, the record reasonably supports the agency's
assessment that WPS proposed various business process improvements to
promote fiscal accountability and limit unnecessary government
expenditures.  In making the source selection decision, the SSA
specifically referenced each of these factors, recognized the magnitude of
PGBA's price advantage, but concluded that WPS's higher price was "more
than justified" by its superiority with regard to the more important
non-price factors.  Agency Report, Tab 18, at 25.  On this record we find
no basis to question the reasonableness of the source selection decision.

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

   ------------------------

   [1] Medicare and Tricare coverage differ in various ways.  The Medicare
program does not cover any costs for certain items of medical care covered
by Tricare and, for much of the medical care provided, Medicare requires
beneficiaries to share costs by means of co-payments and deductibles. 
Conversely, in a few instances, Medicare provides coverage where Tricare
does not. 

   [2] The agency's acquisition plan provided for evaluating proposals under
each technical subfactor using an adjectival rating scheme of: 
blue/exceptional (exceeds specified standards in a manner beneficial to
the government); green/acceptable (meets standards), yellow/marginal
(fails to meet standards, significant but correctable weaknesses), and
red/unacceptable (fails to meet standards, weaknesses are uncorrectable
without major proposal revision).  Agency Report, Tab 48 at 271.    In
addition, each subfactor was evaluated for proposal risk, that is, the
risk associated with an offeror's proposed approach to performing the
contract requirements, as high, moderate, or low.  Agency Report, Tab 48,
at 272. 

   [3] The record is clear that PGBA, LLC was formed in January 2002, Agency
Report, Tab 5, at 98, and that, at the time initial proposals were
submitted in February 2003, it had substantial past performance experience
under the predecessor MCS contracts.  Agency Report, Tab 77.  Accordingly,
PGBA, LLC was not "formed for the purposes of proposing on this RFP." 
Indeed, when the agency sought a corporate financial guarantee from PGBA's
parent corporation, BlueCross BlueShield of South Carolina, PGBA's
representatives resisted, arguing:  "as part of establishing [PGBA LLC],
the separate subsidiary company with its own government structure, its own
dedicated resources . . . we attempted to put the necessary financial
strength behind [PGBA, LLC] to not require a performance guarantee." 
Agency Report, Tab 100, at 89.  

   [4] The third offeror's proposal is not relevant to resolution of PGBA's
protest.  Accordingly, our decision here does not further discuss that
proposal.

   [5] The final evaluated staffing levels proposed by WPS under the contract
line item numbers (CLINs) for claims processing and administration ranged
from approximately [deleted] full time equivalent (FTE) staff years to
approximately [deleted] FTEs.  Agency Report, Tab 38, at 143; Tab 16,
atA 38.  The final evaluated staffing levels proposed by PGBA under those
CLINs ranged from approximately [deleted] FTEs to approximately [deleted]
FTEs.  Agency Report, Tab 38, at 143; TabA 10, at 142, 145, 149.  At the
hearing conducted by GAO in connection with this protest, PGBA's
cost/price consultant testified that WPS's proposed total staffing
exceeded PGBA's proposed staffing by approximately [deleted] FTEs. 
Hearing Transcript  (Tr.) at 708.

   [6] More specifically, the SSET noted that PGBA's proposal neglected to
"make any mention whatsoever of the Dual Eligible population under 65"
(that is, beneficiaries that qualify for Medicare based on disability
status rather than age); failed to acknowledge that this contract will
cover services rendered in Guam, the U.S. Virgin Islands, American Samoa
and the Northern Mariana Islands; failed to commit to meet all standards
explicitly listed in the Tricare Operations Manual; and failed to
adequately discuss training related to the data access evaluation
subfactor.  Agency Report, Tab 43, at 206-07.

   [7] The agency applied an adjectival rating system with regard to
evaluation of past performance in which it used the following ratings: 
"high confidence" (no doubt exists that offeror will successfully
perform); "confidence" (little doubt exists that the offeror will
successfully perform); "neutral" (no performance record identifiable);
"little confidence" (substantial doubt exists that offeror will
successfully perform); and "no confidence"(extreme doubt exists that
offeror will successfully perform).  Agency Report, Tab 49, at 296.

   [8]  In resolving this protest, our Office conducted a three-day hearing,
on the record, during which testimony was provided by seven agency
witnesses (the source selection authority, the source selection evaluation
board (SSEB) chair, the PRAG chair, the SSET chair, an SSET evaluator, a
requirements specialist, and the cost/price analyst), two protester
witnesses (a cost/price consultant and an information technology
specialist), and one intervenor witness (a corporate vice-president). 

   [9] Tab 77 of the Agency Report contains four separate CPE reports
regarding PGBA's performance--one for each of the MCS contractors for whom
PGBA functioned as a claims processing subcontractor.  Because the
conclusions discussed and quotations included in this decision appear in
each of the four reports, we have provided separate citations to each
report.

   [10] TMA issued the final CPE reports for WPS and PGBA on October 18,
2002.  In performing this CPE effort, TMA used equal sample sizes of
claims for each contractor.  Agency/Intervenor's Joint Post-Hearing
Comments, Nov. 3, 2003, at 176; Agency Report, Tab 77 at 9; Agency Report,
Tab 78 at 259.  As part of the CPE process, TMA provided copies of the
draft CPEs to both WPS and PGBA, seeking their input and responses to the
agency's preliminary findings/assessments.  PGBA and WPS provided
responses to TMA which were considered and, in some instances, included in
the final CPE reports.  Agency Report at 17. 

   [11] As noted above, the solicitation stated:  "The offeror . . . shall
submit a past performance report . . . for each of their current top five
overall accounts based on gross revenues.  The offeror shall not include
accounts from their own subsidiaries .A . . or other team members." 
Agency Report, Tab 1, at 480. 

   [12] PGBA did not submit past performance reports from TriWest Healthcare
Alliance Corporation or Sierra Military Health Services, Inc., both of
which were MCS contractors and among PGBA's "top five" accounts based on
gross revenues. 

   [13] As noted above, PGBA, LLC was established as a subsidiary of
BlueCross BlueShield of South Carolina (BCBSSC) in January 2002 and had
significant past performance information related to its own performance of
the claims processing function under the predecessor MCS contracts,
including performance as a subcontractor for TriWest and for Sierra.  The
agency states that, in response to questions regarding this matter,
BCBSSC's president acknowledged that the past performance information PGBA
had submitted related to contracts that had been performed by BCBSSC
and/or PGBA's sister corporations and that "[n]either PGBA, LLC, nor the
former Tricare Division, PGBA, played a role in the performance of [these
contracts]."  Agency Report, Tab 22, at 99.

   [14] Due to PGBA's omission of information from TriWest and Sierra, the
PRAG contacted those companies and obtained past performance information
from them.  The information so obtained in connection with this
procurement was provided to PGBA during discussions to provide PGBA an
opportunity to respond.  PGBA maintains that, because TriWest and Sierra
are no longer intending to subcontract with PGBA, and are competing for
the T-Nex MCS contracts using other subcontractors, the FAR conflict of
interest provisions prohibit consideration of past performance information
from them.  At the GAO hearing, the SSA testified that she treated the
information the PRAG obtained from TriWest and Sierra as "neutral."  Tr.
at 186.  With regard to the CPEs, there is no conflict of interest issue
since, at the time the CPEs were conducted, TriWest and Sierra were not
competing for the T-Nex contracts.  Further, as noted above, the agency's
CPE findings, quoted in the decision above, were contained in the CPE
reports relating to PGBA's subcontract performance under the other two MCS
contractors, Health Net Federal Services, Inc. and Humana Military
Healthcare Services, Inc., see Agency Report, Tab 77 at 61-148, 199-254,
as well as in the CPE reports relating to TriWest and Sierra.

   [15] Both offerors proposed to exceed various aspects of the solicitation
requirements regarding timeliness and accuracy of claims processing.  The
agency concluded that the two proposals were essentially equal with regard
to timeliness and accuracy of claims processing.  Tr. at 53-54.

   [16] As noted above, the CPE reports for both WPS and PGBA were based on
equal numbers of sample claims.

   [17] As noted above, under statute, Medicare coverage is primary and
Tricare coverage is secondary.  Thus, in general, beneficiary claims must
first be submitted to Medicare for processing; these claims are then
transmitted (usually electronically), or "crossed over," to the Tricare
contractor for consideration of additional coverage.    

   [18] There are approximately 1.5 million dual eligible beneficiaries.

   [19] PGBA further explained that "VIP Beneficiaries" would be
"individual[s] identified through complex services issues, Congressional
inquiries, etc."  Id.

   [20] Tricare contractors and Medicare contractors enter into "trading
partner agreements" (TPA) that address their various responsibilities.

   [21] With regard to transitioning in, section L of the RFP directed, among
other things, that:

   The offeror shall present a comprehensive description of and timeline for
all start-up activities.  The description shall specifically address how
the offeror will minimize disruption to beneficiaries.

   *     *    *    *    *   

   The offeror shall provide their data transition plan. . . .

   The offeror shall demonstrate a commitment to engage in a collaborative
and partnering manner with other Tricare contractors.

   Agency Report, Tab 1, at 478.

   [22] The record indicates that PGBA is currently performing approximately
82 percent of the required claims processing for dual eligible
beneficiaries and that WPS is performing approximately 18 percent of that
work. 

   [23] In addition to requiring the successful offeror to take over claims
processing in the regions where it had not previously performed, the
TDEFIC contract requires nationwide coverage for a new group of Tricare
beneficiaries--those that that are under 65 but who qualify for Medicare
due to their medical condition. 

   [24] PGBA makes much of the fact that, during discussions, PGBA's
representatives verbally advised the agency that PGBA would provide access
to whoever the government wanted, stating "every single employee could
have access."  Agency Report, Tab 100, at 62.  However, the broad
representations made during discussions were not repeated in PGBA's
written responses to the agency's data access questions and, as discussed
above, the express terms regarding data access in PGBA's FPR were
substantially more limited.  Agency Report, Tab 10, at 58. 

   [25] We note that, in pursuing this protest, PGBA has not factually
challenged the content of the CPE reports, nor identified any portion of
the substance of those reports that it would have refuted had the agency
provided it with yet another opportunity to address those findings and
conclusions.

   [26] In addition to the various issues addressed elsewhere in this
decision, PGBA's various protest submissions to this Office have
challenged other aspects of the agency's evaluation and source selection
process.  These assertions include that various aspects of PGBA's proposal
should have been considered "strengths"; that the agency misled PGBA and
"coached" WPS during discussions; and that the agency failed to properly
consider the cost realism of WPS's proposal (notwithstanding WPS's higher
proposed price in this fixed-unit-price procurement).  We have considered
all of the issues raised by PGBA in pursuit of this protest and conclude
that none of them constitute bases for sustaining the protest.