TITLE: KMR, LLC, B-292860, December 22, 2003
BNUMBER: B-292860
DATE: December 22, 2003
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KMR, LLC, B-292860, December 22, 2003
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: KMR, LLC
File: B-292860
Date: December 22, 2003
Paul F. Khoury, Esq., Wiley Rein & Fielding, for the protester.
Parish K. Shah, for MindLeaf Technologies, Inc., an intervenor.
Maj. Brent Curtis, Department of the Air Force, for the agency.
Sharon L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency unreasonably rated two vendors' quotations equal under past
performance evaluation factor, where record does not support agency's
finding that awardee's experience was relevant to the requirements of the
solicitation.
DECISION
KMR, LLC protests the award of a task order contract to MindLeaf
Technologies, Inc. under request for quotations (RFQ) No.
F08651-03-R-0081, issued by the Department of the Air Force for
centralized appointment and referral services for military healthcare
facilities at Eglin Air Force Base and Hurlburt Field, Florida. KMR, the
incumbent contractor for this work, challenges the reasonableness of the
agency's evaluation of past performance and *best value* determination.
We sustain the protest.
The RFQ, issued as a small business set aside, contemplated the award of a
fixed‑price contract to a Federal Supply Schedule (FSS) vendor in
accordance with Federal Acquisition Regulation (FAR) S: 8.4. The selected
vendor was to operate a number of call centers and appointment desks,
including the Centralized Appointment Call Center (CACC), Referral
Management Center (RMC), Primary Care Manager by Name Desk (PCMBND),
Tricare Plus Enrollment Center (TPEC), and several health clinic
appointment desks that were to be operated like the CACC.[1] To operate
these centers and desks, the vendor would have to verify beneficiary
eligibility, schedule appointments, and process referral requests. The
vendor would also have to register patients, assign them to a primary care
manager, and enroll eligible patients in the Tricare Plus program as
appropriate.
The RFQ stated that award would be made to the vendor representing the
*best value,* and listed past performance, mission capability, and price
as evaluation factors in descending order of importance.[2] Mission
capability was to be evaluated on a pass/fail basis whereas past
performance was to be qualitatively evaluated.
Past performance was to be evaluated *[u]sing questionnaires received from
the offerors' customers, and data independently obtained from other
Government and commercial sources.* The RFQ specified that the purpose of
the past performance evaluation was *to allow the Government to assess the
offeror's ability to perform the effort described in this [RFQ], based on
the offeror's demonstrated present and past performance on relevant
contracts.* RFQ, attach. 4, Basis for Contract Award, at 1‑2. In
its initial form, the RFQ defined relevant contracts to be *contracts for
Central Appoint Services at Military Installation[s],* but this definition
was eliminated from the RFQ by Modification 2 to the RFQ. AR, Tab 6, RFQ
Modification 2. However, the RFQ stated that *[o]nly references for same
or similar type contracts [were] desired,* RFQ, attach. 3, Proposal
Preparation Instructions, at 2, and that *[i]n evaluating past
performance, the Government reserves the right to give greater
consideration to information on those contracts deemed most relevant to
the effort described in this [RFQ].* RFQ, attach. 4, Basis for Contract
Award, at 2. Under the RFQ evaluation scheme, *[o]fferors with no
relevant past or present performance history shall receive the rating
'neutral,' meaning the rating is treated neither favorably nor
unfavorably.* Id.
Both KMR and MindLeaf submitted responses to the RFQ and received passing
ratings for mission capability. KMR's proposed price was [REDACTED],
while MindLeaf's was $4,418,578.92. Agency Report (AR), Tab 18, Price
Checklist.
With regard to past performance, KMR identified references for its two
contracts at Eglin Air Force Base and Hurlburt Field, where it performed
CACC, RMC, PCMBND, TPEC, and Family Health Clinic Appointment Desk
services; another contract at Tyndall Air Force Base, where it performed
CACC services; and a Tricare Pacific Enrollment Processing Management and
Marketing Support Project, where, as a subcontractor, KMR provided Tricare
information to beneficiaries, processed referrals, and resolved claims
issues. AR, Tab 11, KMR Past Performance Proposal, at 3-7. KMR's
references completed past performance questionnaires rating KMR on
a scale of one to six., with six being the best rating. Two references
(for the Elgin and Tyndall Air Force Bases) gave KMR performance ratings
of all sixes; the other two gave ratings of fours and fives. AR, Tab 15,
KMR Past Performance Questionnaires. The Air Force averaged these scores,
which resulted in an overall past performance score for KMR of 5.35, which
the agency found warranted a rating of *very good.*[3] The Air Force also
found KMR's past contracts to be *relevant* to the services sought in the
statement of work (SOW). AR, Tab 17, KMR's Past Performance Evaluation,
at 1-4.
MindLeaf identified past performance references for a contract with the
Centers for Medicare and Medicaid Services (CMS), for which MindLeaf
provided *systems design and development to modernize the information
systems that supports the Overpayment Tracking business processes*; and
for a contract involving the Massachusetts Division of Medical Assistance,
for which MindLeaf, as a subcontractor, provided *HIPAA [Health Insurance
Portability and Accountability Act] Translation tool software and support
services.* MindLeaf identified a third contract with a company called
Macromedia, but did not identify the purpose of this contract (except to
state it was not related to healthcare), although it stated that the
contract included the following tasks: using e-mail; performing general
word processing; operating spreadsheet programs; preparing, formatting,
editing, proofreading and routing correspondence; distributing mail; and
sending and receiving classified documents.[4] AR, Tab 12, MindLeaf's
Past Performance Proposal, at 1-7. These three references provided
questionnaires rating MindLeaf's performance as fives and sixes.[5] AR,
Tab 16, MindLeaf Past Performance Questionnaires. The Air Force averaged
the performance scores received, and gave MindLeaf an overall past
performance score of 5.87, which also equated to a rating of *very good.*
The agency concluded that MindLeaf's past contracts were *somewhat
relevant* to the SOW.[6] AR, Tab 17, KMR's Past Performance Evaluation,
at 2, 4.
Although the source selection decision concluded that MindLeaf's
referenced contracts were *somewhat relevant,* it did not state why this
was the case. Instead, the contracting officer concluded:
After reviewing the information provided on [MindLeaf's] website, it is
clear that MindLeaf has experience with IT [information technology] and
healthcare. In addition, the type of work they have performed in the past
is extremely technical in nature and they managed them well. I find
nothing complex about the work included in the SOW and nothing which would
preclude MindLeaf from performing the duties.
AR, Tab 18, Memorandum for Record, August 27, 2003, P: 1. In comparing
the vendors' quotations, the Air Force found that although KMR's past
performance was more relevant than MindLeaf's, it was *not as good,* given
KMR's lower overall past performance score. AR, Tab 18, Memorandum for
Record, Aug. 27, 2003, P: 2. Thus, the two vendors' quotations were found
to be *roughly equivalent* in terms of past performance. Contracting
Officer's Statement P: 4. Since the vendors' quotations were also rated
equally for the mission capability factor and MindLeaf quoted a lower
price, the Air Force selected MindLeaf's quotation for award.
KMR protests the agency's past performance evaluation and award decision,
contending that MindLeaf's past performance was not relevant to the SOW
and therefore cannot reasonably be found to be *roughly equivalent* to
that of KMR, who, in contrast, has directly relevant experience performing
the central appointment services sought under the RFQ. The Air Force
argues that prior experience with central appointment services was deleted
from the RFQ as the definition of relevant contracts and thus such
experience was not required, and that the agency reasonably exercised its
discretion in determining that Mindleaf's references were somewhat
relevant.
As noted above, the evaluation was conducted under the FSS program. Under
this program, an agency is not required to conduct a competition before
using its business judgment in determining whether ordering supplies or
services from an FSS vendor represents the best value and meets the
agency's needs at the lowest overall cost. FAR S: 8.404; OSI Collection
Servs., Inc., B-286597, B-286597.2, Jan. 17, 2001, 2001 CPD P: 18 at 6.
However, where an agency decides to conduct a formal competition for award
of a task order contract, as is the case here, we will review the agency's
actions to ensure that the evaluation was fair and reasonable and
consistent with the solicitation. COMARK Fed. Sys., B-278343, B-278343.2,
Jan. 20, 1998, 98-1 CPD P: 34 at 4-5. With regard to past performance
evaluations conducted under the FSS program, we recognize that those
evaluations, including the agency's determinations of the relevance and
scope of the vendors' performance history to be considered, are a matter
of agency discretion; we will not substitute our judgment for the agency's
reasonable past performance conclusions, and we will question
those conclusions only where they are not reasonably based or are
undocumented. Power Connector, Inc., B-286875, B‑286875.2, Feb. 14,
2001, 2001 CPD P: 39 at 3; OSI Collection Servs., Inc., supra, at 6.
As noted above, the RFQ indicated that the Air Force considered relevant
only contracts involving the *same or similar* services for purposes of
evaluating past performance. Here, giving due deference to the agency's
broad discretion in determining whether a contract is relevant, the agency
has not rationally explained, nor does the record indicate, how MindLeaf's
referenced contracts are relevant--that is, are the *same or similar*--to
the effort described in the RFQ. Specifically, although the Air Force
states that MindLeaf *has experience with IT and healthcare,* it does not
explain, and the record does not support, how any of MindLeaf's past
contracts relating to IT or healthcare are similar to the RFQ
requirements, which entail operating call centers and appointment desks.
As the agency concedes, MindLeaf's past performance did not include any
experience relating to CACC, RMC, appointment desk services, or any other
specific services required by the SOW. Instead, the record confirms that
MindLeaf's experience relates only to computer-based systems design,
development, and related support, and to the extent that MindLeaf
identifies any experience in its quotation related to healthcare, that
experience involves software design for implementing HIPAA compliance
regulations and supporting an overpayment tracking system, which do not
appear to be related to any requirement of the SOW here.[7] Although the
agency now explains that it determined MindLeaf's experience to be
somewhat relevant *[s]ince most of the work included in the [SOW] was done
utilizing computers and program management,* Contracting Officer's
Statement, P: 3, the SOW does not identify computer and program management
skills as part of the effort required, but rather emphasizes staff
involvement in answering incoming telephone calls and performing
appointment scheduling, referral processing, and related services on
medical matters, areas in which MindLeaf apparently has no experience.[8]
The essence of the Air Force's argument as to why MindLeaf's experience is
relevant is that if MindLeaf has the corporate management expertise and
commitment to successfully perform the far more complex services involving
IT and/or healthcare that were involved in its referenced contracts, it
should be able to successfully perform the far less complex services
involved here, even though it has no experience in performing anything
like these type of services.[9] We question the reasonableness of this
analysis: a firm's success in performing complex IT tasks does not
necessarily indicate that it can successfully perform the contract here
involving significantly different tasks and skills, even if they involve
less sophisticated skills. More importantly, though, by adopting this
approach, the Air Force abandoned the RFQ's definition of *relevant* as
indicating the same or similar work.
In sum, the agency has not reasonably explained why MindLeaf's experience
is relevant. If MindLeaf has no relevant experience, it deserved a
neutral past performance rating under this RFQ evaluation scheme, which
would be inferior to KMR's very good past performance rating, thus
requiring a cost/technical tradeoff analysis that was not needed
previously.
We sustain the protest.
We recommend that the agency reevaluate vendors under the past performance
evaluation factor and determine and document whether the quotations
should, in fact, be equally rated, or whether KMR's past performance is
actually superior, as the record suggests.[10] We further recommend that
the agency perform a new best value determination. Additionally, we
recommend that the protester be reimbursed its cost of filing and pursuing
the protest, including reasonable attorneys' fees. Bid
Protest Regulations, 4 C.F.R. S: 21.8(d) (2003). The protester should
submit its certified claim for costs to the contracting agency within 60
days of receiving this decision. 4 C.F.R. S: 21.8(f)(1).
The protest is sustained.
Anthony H. Gamboa
General Counsel
------------------------
[1] These appointment desks were for the Family Health Clinic, Family
Practice Clinic, Pediatric Clinic, Internal Medicine Clinic, and Flight
Medicine Clinic.
[2] Combined, the non-price factors were *significantly more important
than* price. RFQ, attach. 4, Basis for Contract Award, at 2.
[3] The Air Force initially erred in calculating KMR's score to be 5.05,
but corrected this error before award was made. AR, Tab 17, Memorandum
for Record, Sept. 12, 2003.
[4] Mindleaf's quotation also indicated that these tasks were performed
under its two other referenced contracts.
[5] MindLeaf's quotation identified two other contracts assertedly
relevant to the SOW. On one of these contracts, MindLeaf, as a
subcontractor, implemented HIPAA compliance rules; and on the other, it
developed and hosted a web-based logistics collection and reporting
system. These references did not provide questionnaires and were not
considered by the Air Force in the past performance evaluation.
[6] Under the mission capability factor, however, the Air Force noted that
MindLeaf's quotation *does not indicate any past appointment or referral
management experience.* AR, Tab 14, Mission Capability Evaluation
Worksheet, at 2.
[7] In MindLeaf's comments submitted in response to the protest, the firm
adds that its healthcare experience *ranges from complex HIPAA projects to
providing staffing resources (in Information Technology to Administrative
positions)* and includes performing *Healthcare Studies, Claims, Medicare,
Medicaid, HIPAA, Overpayment, software development, [and]
Medical--Administrative services* under *various IT, Administrative, and
related contracts.* MindLeaf Comments, Sept. 24, 2003, at 2. However,
MindLeaf's website indicates that this experience is limited to systems
development of a claims reporting system and IT solutions for HIPAA
compliance. MindLeaf does not claim to have any experience involving
direct patient contact, operating call centers or appointment desks, or
providing scheduling and referral services, the services required by the
RFQ, nor does it explain how its experience is relevant to the RFQ
requirements.
[8] Furthermore, the RFQ provides that *the government will furnish all
necessary equipment to support the functions described in this contract,*
including *access to all required automated systems,* RFQ S: 3.1, further
suggesting that MindLeaf's systems development experience may be
irrelevant.
[9] Further calling into question the reasonableness of the agency's
assessment is the fact that the dollar values of the referenced contracts
performed by MindLeaf are significantly smaller than the estimated value
of the task order issued here, and lower than the value of most of the
past contracts performed by KMR.
[10] Our review of the record also suggests that MindLeaf's quotation may
not have met all of the requirements for the mission capability factor and
may not have been deserving of an equal rating for this factor. See AR,
Tab 14, MindLeaf Mission Capability Checklist, at 2. The agency may wish
to reevaluate quotations under this factor as well.