TITLE: B-298293; B-298293.2, Air Products Healthcare, August 11, 2006
BNUMBER: B-298293; B-298293.2
DATE: August 11, 2006
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B-298293; B-298293.2, Air Products Healthcare, August 11, 2006
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: Air Products Healthcare
File: B-298293; B-298293.2
Date: August 11, 2006
Douglas L. Patin, Esq., Robert J. Symon, Esq., and Katherine L. Ruff,
Esq., Bradley Arant Rose & White, for the protester.
Dennis Foley, Esq., and Philip Kaufman, Esq., Department of Veterans
Affairs, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that agency improperly determined that protester's proposal was
technically unacceptable is denied where the record shows that the
agency's conclusion was reasonable, and where the agency clearly advised
the protester of its concerns during discussions.
DECISION
American Homecare Supply, LLC, dba Air Products Healthcare protests the
award of a contract to Rotech Healthcare Inc. by the Department of
Veterans Affairs (VA), pursuant to request for proposals (RFP) No.
00241-05-00106, issued to procure home oxygen delivery and support
services for veteran patients located in the VA's Veterans Integrated
Service Network (VISN) 1, which includes the New England states of
Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire, and
Maine. Air Products argues that the VA unreasonably concluded that its
proposal was technically unacceptable, failed to hold meaningful
discussions, and conducted an unreasonable evaluation of past performance.
We deny the protest.
BACKGROUND
The RFP here, issued on August 10, 2005, advised potential offerors that
the VA has an ongoing requirement for home oxygen services for
approximately 5,220 veteran patients served by eight VA medical centers
(VAMC) and associated outpatient clinics in the New England area. RFP at
27. In addition, the RFP provided a breakdown of the estimated number of
home oxygen patients served by each of the major facilities within VISN 1.
Specifically, the estimated number of patients for each location is as
follows:
VAMC Bedford, MA 104
VA Boston, MA Healthcare System (HCS) 1,257
VA Connecticut HCS 1,126
VAMC Manchester, NH 442
VAMC Northampton, MA 160
VAMC Providence, RI 570
VAMC Togus, ME 1,300
VAMC White River Junction, VT 261
Id. at 75 (Attach. B).
In addition to the routine patient visits and replenishment of supplies
associated with providing home oxygen services, the RFP required that
offerors be able to provide emergency services at a beneficiary's home
within 6 hours of a call for help, and advised that most emergency
services should be provided within 2 hours of a call. Id. at 28. The RFP
also identified a transition period of 45 days during which the incumbent
contractor would continue to provide these services while the incoming
contractor is taking over. Id. at 31.
The RFP anticipated the award of a fixed-price requirements contract for
these services for 1 base year, followed by up to four 1-year options. The
solicitation advised that proposals would be assessed under each of three
evaluation factors--technical capability, past performance, and price--and
that technical capability and past performance combined would be
"significantly more important than price." Id. at 64. The solicitation
also advised that price would become more important as technical
evaluations became more equal. Id. at 65. Under the technical capability
evaluation factor, the solicitation also identified four subfactors, in
descending order of importance. These were: technical approach, key
management team, financial statement, and curriculum vitae for the project
manager. Id. at 66.
By the September 1, 2005, closing date, the VA received three
proposals--one from Rotech, one from Air Products, and one from a third
offeror. The VA evaluators rated each proposal under the technical
evaluation factors and subfactors, and under the past performance
evaluation factor, using the ratings of A, B, C, or D. The ratings of A
and B were reserved for proposals viewed as outstanding or good,
respectively, while the ratings of C and D were defined as follows:
C -- Fair-Proposal marginally meets the minimum standard requirements of
the rating factor.
D -- Poor-Proposal fails to meet the minimum requirements of the rating
factor.
AR, Tab 17, at 5. The price factor was not rated.
In its proposal, Air Products identified three facilities it would use to
provide the services required here--one in Auburndale, Massachusetts; one
in Warwick, Rhode Island; and one in Stratford, Connecticut. Agency Report
(AR), Tab 7, Air Products Technical Proposal at 1, 3-7. For each of these
facilities, Air Products provided a detailed roster of the employees it
was offering, including the employee's name, position, and years of
experience. Id. at 3-7. The proposal advised that Air Products' Rhode
Island and Connecticut facilities would service patients in those two
states, respectively, while the facility in Auburndale, Massachusetts,
would service patients in Massachusetts, Vermont and New Hampshire. Id. at
8.
With respect to the estimated 1,300 home oxygen patients located in Maine,
the proposal stated that Air Products would "open a fourth facility in
Maine to service the patients of the Togus [ME] VAMC." Id. at 3. The
proposal did not identify any employees for the Maine facility, but
represented that the Maine facility would be "well staffed with
experienced and competent personnel." Id. at 7. The proposal also advised
that Air Products expected to locate its Maine facility in either
Portland, Bangor, or Augusta. (The Togus VAMC is located in Augusta.) Air
Products' initial proposal does not identify any facility, or branch
office, in the states of Vermont or New Hampshire. Id. at 8-10.
In assessing Air Products' initial proposal, three of the five VA
evaluators assigned the proposal a rating of D under the technical
approach subfactor (the most-heavily weighted subfactor), while the
remaining two evaluators assigned a rating of C. AR, Tab 6. These ratings
were averaged to a rating of C- under the technical approach subfactor.
Under the other three technical subfactors, Air Products received average
ratings of C+, C+, and B-/C+. Under the past performance evaluation factor
Air Products received a rating of C/B-.[1] AR, Tab 6. In addition, the
record reflects that all five of the evaluators added narrative comments
to their scoresheets expressing concern about whether Air Products'
approach would provide adequate coverage throughout the geographical
region covered by the contract.[2] Id.
By letter dated October 21, 2005, the VA provided nine discussion
questions to Air Products, and requested that the company submit a "best
and final offer" by November 4. AR, Tab 10. Two of these questions are
relevant here:
1. How do you intend to provide home oxygen services for an entire
VISN, when your previous contracts are with individual VA Medical Centers?
* * * * *
8. Based on your technical proposal, it appears that your company
lacks the staff to provide adequate coverage for Vermont, New Hampshire
and Maine. How do you intend on providing coverage for these areas?
Id.
In its response, Air Products provided a one-paragraph general answer to
the first question, advising the VA that "with the establishment of two
new facilities and the hiring of additional personnel, we are positive we
will have more than sufficient resources available to meet the needs of
the entire VISN." AR, Tab 12, at 2. Air Products' answer to question No. 8
states:
It is our intention to open new depots in White River Junction, VT and
Biddeford, ME or alternate locations that would best fit the needs of the
VA beneficiaries to be serviced. We currently cover all of New Hampshire
out of our Manchester, NH facility. We believe we can open the two new
facilities and have an interim JCAHO [Joint Commission on Accreditation of
Hospital Organizations] Accreditation for both within [deleted] days of
notice of award. Until these two new facilities are opened and accredited,
we have adequate inventory on our vehicles and in short-term storage
facilities to meet the needs of the VA.
Id. at 5. In an additional five sentences provided in answer to question
No. 8, Air Products indicated that it will hire additional personnel to
meet the needs of the VA, and explains that the company has successfully
opened more than 20 new locations over the last 2 years.
In assessing Air Products' final proposal, four of the five VA evaluators
assigned a rating of D under the technical approach subfactor of the
technical evaluation factor. AR, Tab 11, at 1. The remaining evaluator
assigned a rating of B, although he wrote a narrative comment indicating
that, in his view, Air Products lacks the capacity to perform this
contract, and that "their [Air Products'] responses do not warrant any
changes in my score."[3] Id. at 1, 3. Averaging the four ratings of D,
with one rating of B, the technical evaluators assigned an average rating
of C- to Air Products under the technical approach subfactor. The
remaining technical subfactor ratings were C+, C+, and B-. The ratings
assigned for past performance were C/B-, with an average overall rating
for Air Products of C.
In addition to the letter ratings assigned to Air Products' final
proposal, the evaluators expressed on-going concerns in contemporaneous
narrative comments prepared for the record. With respect to the issue of
Air Products' ability to cover the entire geographical area, the Price
Negotiation Memorandum notes:
In Air Products' original proposal they stated they had facilities in
MA, CT and RI. They planned on covering NH and VT out of the MA office
and they planned on opening an office in ME. In the BAFO response they
revised their proposal by saying they would open a facility in VT too.
They also mention in their BAFO that they have a facility in NH but no
information on the facility's size was given. Because no information on
this facility is given and it was not mentioned in the original proposal
the question arises does it exist? And even if it does, how big is the
facility? How many staff is there?
Of major concern is the time it will take to open any proposed
facilities in ME and VT and meeting the time requirements, i.e.,
responding to emergency calls within 6 hours and servicing all of VISN 1
while these new facilities are being opened.
AR, Tab 17, at 8-9.
Reviewing the final evaluation ratings, the contracting officer (CO)
agreed with the four evaluators who assigned a D rating to Air Product's
final proposal under the technical approach subfactor, and concluded that
the B rating assigned by the remaining evaluator was in error. CO's
Statement at 4. As a result, the CO reduced the average rating for the
technical approach subfactor from C- to D, and concluded that the proposal
was unacceptable.[4] Id.
At the conclusion of the final evaluation, both Air Products' proposal,
and that of the third offeror, were viewed as technically unacceptable.
AR, Tab 16, at 3. As a result, the CO recommended award to Rotech on the
basis that its proposal was technically acceptable, and that its price of
$45.5 million was reasonable. AR, Tab 17, at 10-11. In contrast, Air
Products' price was $42.2 million, and the price of the other unacceptable
offeror was $37.8 million. Id. Since Rotech's proposal was viewed as the
only acceptable offer, the CO did not make a cost/technical tradeoff.
By letter dated May 2, Air Products was provided with a debriefing, and
this protest followed.
DISCUSSION
Air Products argues that the agency unreasonably concluded that its
proposal was technically unacceptable because of an apparent concern about
how long it would take the company to open new facilities. Air Products
also argues that the VA failed to provide meaningful discussions because
the agency did not advise the company of this concern. In addition, Air
Products contends that the agency improperly abandoned the evaluation
scheme when it found the proposal unacceptable despite the proposal's
average rating of C- under the technical approach subfactor, and average
rating of C overall. As set forth below, we think Air Products has recast
the VA's concerns about its proposal more narrowly than the evaluation
record warrants, and we disagree with the protester's contentions that the
agency acted unreasonably in concluding that the proposal was technically
unacceptable.
In reviewing a procuring agency's evaluation of an offeror's technical
proposal, our Office's role is limited to ensuring that the evaluation was
reasonable and consistent with the terms of the solicitation and
applicable statutes and regulations. Urban-Meridian Joint Venture,
B-287168, B-287168.2, May 7, 2001, 2001 CPD para. 91 at 2. Our Office will
not question an agency's evaluation judgments absent evidence that those
judgments were unreasonable or contrary to the stated evaluation criteria.
Kay & Assocs., Inc., B-291269, Dec. 11, 2002, 2003 CPD para. 12 at 4.
In support of its argument that the VA was primarily concerned about the
time it would take to open facilities, and that the VA failed to advise it
of this concern, Air Products correctly quotes a comment in the final
evaluation materials stating:
Of major concern is the time it will take to open any proposed
facilities in ME and VT and meeting the time requirements, i.e.,
responding to emergency calls within 6 hours and servicing all of VISN 1
while these new facilities are being opened.
AR, Tab 17, at 9. In our view, despite the VA's description of the time
needed to open facilities as a "major concern," its concern was much
broader than this more limited matter.
For example, the evaluation materials in the record note (one page prior
to the quotation set out above) that Air Products originally stated that
the company: (1) had facilities in Massachusetts, Connecticut and Rhode
Island; (2) planned on providing services to patients in New Hampshire and
Vermont out of the Massachusetts facility; and (3) planned on opening a
facility at an, as yet, undetermined location in Maine. Id. at 8. This
approach led the agency to ask Air Products during discussions how the
company would provide coverage throughout the region, and especially how
it would provide coverage to patients located in Vermont, New Hampshire
and Maine. AR, Tab 10.
In its answer, Air Products did not clear up these matters, but instead,
further clouded them. Specifically, in its final response, Air Products,
for the first time: (1) referenced a Manchester, New Hampshire facility
nowhere mentioned in its initial proposal; (2) promised to open a facility
in White River Junction, Vermont, to provide services to patients in that
state; and (3) advised that it expected to be able to open, and obtain
accreditation for, the new facilities in Vermont and Maine "within
[deleted] days of notice of award." AR, Tab 12, at 5. Apparently
recognizing the fact that the stated [deleted] period was [deleted] the
45-day transition period identified in the solicitation, Air Products also
advised that "[u]ntil these two new facilities are opened and accredited,
we have adequate inventory on our vehicles and in short-term storage
facilities to m." Id.
This record as a whole--from the initial evaluations, including the
narrative comments prepared by all five VA evaluators; to the discussion
questions ("it appears that your company lacks the staff to provide
adequate coverage for Vermont, New Hampshire and Maine" AR, Tab 10); to
the final evaluation conclusion that the proposal is
unacceptable--evidences a consistent and clearly-stated concern about Air
Products' capacity to provide home oxygen services to veteran
beneficiaries located throughout the New England region. In our view, this
record effectively refutes the protester's contention that the evaluation
was unreasonable, and refutes any claim that the discussion questions here
failed to reasonably advise the protester of the nature of the VA's
concerns. See Poly-Pacific Techs., Inc., B-293925.2, Dec. 20, 2004, 2004
CPD para. 250 at 4.
With respect to the protester's contentions that the VA could not
reasonably conclude that its proposal was unacceptable given its average
rating of C- under the technical approach subfactor, and average rating of
C overall, we again disagree.
In this regard, we note that four of the five VA evaluators assigned a
rating of D to the proposal under the most heavily-weighted technical
subfactor, indicating their view that the proposal failed to meet the
RFP's minimum requirements. In addition, the one remaining evaluator, who
assigned a B rating--which was averaged with the four ratings of D to
produce a consensus rating of C- under this subfactor--added a narrative
comment indicating that he, too, thought Air Products lacked the capacity
to perform this contract, and that nothing in the company's final response
provided a basis to change his earlier rating of C under this subfactor.
AR, Tab 11, at 1, 3. Under these circumstances, we see nothing
unreasonable about the CO's decision to change Air Products' average
rating under this subfactor to a rating of D, or his conclusion that the
proposal was technically unacceptable, and could be excluded from further
consideration. See Property Analysts, Inc., B-259853.2, B-259853.3, June
13, 1995, 95-1 CPD para. 270 at 4 (CO reviewed evaluations and proposals,
noticed inconsistent scoring, and reasonably adjusted the scoring to
reflect his view of the proposals).
Finally, to the extent that the VA does express a concern in its final
evaluation materials about the amount of time Air Products anticipates for
opening, and gaining accreditation for, new facilities, we note that the
final proposal's information about timeframes was inconsistent with both
the initial proposal and the requirements of the RFP. Moreover, by
providing this new and inconsistent information in its final response, Air
Products cannot reasonably fault the agency for failing to raise the
matter during discussions.[5] See Mine Safety Appliances Co., B-242379.5,
Aug. 6, 1992, 92-2 CPD para. 76 at 6-7 (agency is not required to reopen
discussions to allow offerors to address problems first introduced in an
offeror's final offer).
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Under the past performance evaluation factor, an offeror's past
performance on VA contracts was assessed separately from its past
performance on other contracts; thus, there are two ratings for each
offeror's past performance score. RFP at 66; AR, Tab 6. In contrast, the
B-/C+ rating referenced above for the fourth technical subfactor,
curriculum vitae for the project manager, is an attempt by the evaluators
to strike a midpoint between the B and C ratings; it does not reflect two
separate scores, as with the past performance rating.
[2] In comparison, Rotech's initial proposal received average ratings of
A-, A-, B, and A-, under the four technical subfactors, with average
ratings of C+/Not Applicable, under the past performance evaluation
factor.
[3] This evaluator initially assigned a rating of C to Air Product's
proposal under the technical approach subfactor of the technical
evaluation factor. Compare AR, Tab 6, at 3 (showing an initial rating of C
from this evaluator for Air Products under the technical approach
subfactor) with AR, Tab 11, at 3 (showing a final rating of B, despite the
narrative comment quoted above).
[4] This decision uses the average ratings noted on the summary sheet
contemporaneously prepared by the technical evaluation panel, rather than
the slightly-lower average ratings reflected in the CO's Statement
prepared in response to this protest. Compare AR, Tab 11, at 1 (the
technical evaluation summary sheet showing an average rating of C- for
this subfactor) with CO's Statement at 4 (claiming the average rating was
D+/C- for this subfactor).
[5] Air Products also raises arguments regarding the past performance
evaluation here. Since we conclude that the agency reasonably decided the
protester's proposal was technically unacceptable, we need not consider
these arguments. See ProMar; Urethane Prods. Corp., B-292409 et al., Aug.
25, 2003, 2003 CPD para. 187 at 8 n.11.