TITLE: B-298590; B-298590.2; B-298590.3, General Injectables & Vaccines, Inc., November 15, 2006
BNUMBER: B-298590; B-298590.2; B-298590.3
DATE: November 15, 2006
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B-298590; B-298590.2; B-298590.3, General Injectables & Vaccines, Inc., November 15, 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: General Injectables & Vaccines, Inc.
File: B-298590; B-298590.2; B-298590.3
Date: November 15, 2006
Lawrence Z. Lorber, Esq., Mark J. Biros, Esq., Stephen D. Solomon, Esq.,
James F. Segroves, Esq., Meredith C. Bailey, Esq., and Rachel F. Glickman,
Esq., Proskauer Rose LLP, and Gilbert J. Ginsburg, Esq., Law Office of
Gilbert J. Ginsburg, for the protester.
David R. Hazelton, Esq., Roger S. Goldman, Esq., Donald M. Remy, Esq.,
Kyle R. Jefcoat, Esq., and Joshua K. Chandler, Esq., Latham & Watkins LLP,
and Carole S. Ungvarsky, Esq., McKesson Corporation, for McKesson
Specialty Distribution LLC, an intervenor.
Daniel Meron, Esq., Dana J. Petti, Esq., and Elise Harris, Esq., Centers
for Disease Control and Prevention, Department of Health and Human
Services, for the agency.
Paul N. Wengert, Esq., and Glenn G. Wolcott, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that agency conducted discussions with eventual awardee, to
determine whether its proposal met go/no-go requirement, is denied where
solicitation did not preclude agency from conducting discussions regarding
the requirement, and agency subsequently conducted discussions with all
offerors.
2. Protest that agency's efforts to reach consensus among evaluation
panelists constituted improper "pressure" is denied where agency's final
evaluation ratings are reasonably supported by record, and protester has
not identified any substantive flaw in the evaluation of final proposal
revisions.
DECISION
General Injectables & Vaccines, Inc. (GIV) protests its proposal's
exclusion from the competitive range by the Centers for Disease Control
and Prevention (CDC) under request for proposals (RFP) No. 2006-N-08248,
for vaccine stockpile management and distribution under the Vaccines for
Children Act, 42 U.S.C. sect. 1396s (2000). GIV asserts that evaluators
were improperly pressured to change their initial evaluations, and that
CDC conducted improper discussions with the eventual awardee, in order to
allow it to pass a go/no-go evaluation, but failed to conduct meaningful
discussions with GIV regarding its proposed price.
We deny the protest.[1]
On November 1, 2005, CDC issued the RFP, seeking proposals to manage a
consolidated supply of vaccines under the Vaccines for Children Act, which
provides federally-purchased vaccines for administration to children who
meet certain criteria.[2] RFP at 6. The RFP indicated that the contractor
would be responsible for filling an estimated 47,000 shipments initially,
increasing to an estimated 260,000 shipments annually.[3] RFP at 8.
The RFP provided that each proposal would first be evaluated on the
adequacy of the offeror's information technology "Systems Security Plan."
RFP amend. 5, at 22. Specifically, the RFP required offerors to respond to
various questions regarding security controls, including security of
computer information systems. The RFP further provided that the offerors'
responses would be pre-screened on a "go/no-go" basis, and stated that
"proposals that do not pass this first level of screening will not be
further considered in the Source Selection process." RFP amend. 5, at 22.
The RFP also provided that proposals evaluated as acceptable under the
go/no-go requirement would be evaluated qualitatively on four technical
criteria, which were "soundness of technical approach" (30 points),
"personnel/management plan" (25 points), "organizational experience" (25
points), and "facilities" (20 points). Lastly, the RFP specified that
"technical merit and other non-cost factors"[4] were of equal importance
to price. RFP amend. 7, at 4.
Three offerors, including GIV and McKesson Specialty Distribution LLC
(McKesson), submitted proposals by the February 21, 2006 deadline
specified in the RFP. After an initial review of the proposals, the
evaluators determined that McKesson's proposal had provided inadequate
responses to a significant number of the system security plan questions by
responding "N/A," "Unclear," "No," or by leaving the question unanswered.
On March 7, CDC asked McKesson to "clarify" its responses. On March 12,
McKesson submitted revised answers to those security questions; CDC
ultimately determined that those responses were adequate.
CDC then proceeded to evaluate the initial proposals. The contracting
specialist who reviewed the evaluation report expressed concern that the
evaluation reflected disagreement among the evaluators, and that the
numerical scores did not correspond to the narrative. She asked that the
evaluation panel reconvene because "we need more detail in some areas."
She also pointed out large differences among the evaluators in their
scoring for McKesson, and noted that GIV did not "seem to understand our
requirement, yet they received the highest score." Agency Report (AR), Tab
13, E-mail from Contracting Specialist to Technical Panel Members
(Mar. 22, 2006).
The technical panel reconvened on March 29, and prepared a revised report.
Two of the four[5] voting panel members subsequently stated that they felt
"pressured" or were "encouraged to change scores" at this meeting. In
contrast, the other panel members stated that they felt that the meeting
resulted in an opportunity to reach a clearer understanding of the
proposals and establish a consensus on that basis. Supplemental Agency
Report (Sept. 25, 2006), app. A, Declarations of Individual Technical
Panel Members.
CDC conducted oral discussions with GIV on May 8, and then sent a final
written discussions document to GIV that identified various remaining
concerns. Among other things, the agency's written discussions advised GIV
of the following:
GIV is proposing [deleted] people to support CDC for the East Region,
but their past 5 contracts document [deleted] personnel supporting
multiple state contracts ([deleted] projects) in [deleted] facilities.
Why is GIV proposing [deleted] people with two distribution sites with
similar volume? It appears GIV's costs are not reasonable based on this
assessment of staffing, fewer sites and similar volume of vaccine
distribution.
AR, Tab 19, Issues for Discussion, at 4-5.
Similarly, CDC further put GIV on notice that its proposed costs were too
high, stating:
We are aware that GIV has existing contracts with similar requirements
(72 hour cold chain) with other government entities at unit prices
substantially lower than those proposed. Please identify the significant
factors that cause this disparity.
Id. at 5.
Subsequently, final proposal revisions (FPRs) were submitted and
evaluated. The evaluation panel's final report continued to reflect
differences among panel members. AR, Tab 22, Technical Panel FPR
Evaluation Report (June 28, 2006) at 1. The narrative evaluation report
explained those differences on the basis that some evaluators felt that
GIV's greater familiarity with CDC resulted in a more detailed proposal,
while "McKesson's FPR was more private sector oriented," but was
considered technically sound. Id. at 2. All of the panel
members--including those stating that they felt "pressured" during the
initial evaluation--have stated that they felt no similar "pressure" in
the evaluation of FPRs. Supplemental Agency Report (Sept. 25, 2006), app.
A, Declarations of Individual Technical Panel Members.
As reflected in the competitive range determination, CDC evaluated GIV's
total price as $241,640,603.77;[6] McKesson's corresponding evaluated
price was $98,970,547.02.
AR, Tab 24, Competitive Range Determination, at 4-5. Based on GIV's
significantly higher evaluated price, along with the fact that the
offerors' technical ratings were relatively close, the contracting officer
eliminated GIV from further consideration, reducing the competitive range
to a single offeror, McKesson. GIV was notified of its proposal's
exclusion from the competitive range on July 18, and requested a timely
pre-award debriefing. This protest followed.[7]
GIV first protests that it was improper for CDC to seek additional
information from McKesson regarding its information technology system
security plans, thereby permitting McKesson to revise its initially
unacceptable responses. Specifically, GIV argues that CDC's March 7
inquiry to McKesson constituted prohibited discussions. CDC responds that
nothing prohibited exchanges with McKesson in this regard.
We agree that CDC's exchanges with McKesson seeking additional information
about its security systems constituted discussions, rather than
clarifications, because CDC needed this information to conclude that
McKesson's proposal was acceptable. See Nu-Way, Inc., B-296435.5,
B-296435.10, Sept. 28, 2005, 2005 CPD para. 195 at 7. However, GIV was not
competitively prejudiced by these discussions. As noted, GIV was similarly
provided discussions and an opportunity to revise its proposal prior to
CDC's final competitive range determination.
GIV places significant emphasis on the RFP provision that "proposals that
do not pass this first level of screening will not be further considered
in the Source Selection process." RFP amend. 5, at 22. To the extent that
GIV is reading this provision as precluding CDC from conducting
discussions with offerors in connection with the "pre-screening" process,
GIV has failed to identify a persuasive rationale for its interpretation.
Accordingly, we decline to sustain its protest of the agency's
determination that McKesson ultimately met the go/no-go security plan
requirements.
GIV next protests that CDC "pressured" two evaluators to change their
scores regarding initial proposals, and that this "pressure" reflected an
effort by CDC "to steer the contract award to McKesson." Supplemental
Protest at 1; Protester's Supplemental Comments at 2. CDC responds that
the record and the declarations of the panel members reflect that the
"pressure" felt by the evaluators in connection with the initial
evaluations was, in fact, a valid effort to reach consensus among
panelists with strongly-held conflicting views about the benefits of the
offerors' proposals.
We have noted that it is not unusual for individual evaluator ratings to
differ from one another, or to differ with the consensus ratings
eventually assigned, and source selection officials may reasonably
disagree with the evaluation ratings and results of lower-level
evaluators. Verify, Inc., B-244401.2, Jan. 24, 1992, 92-1 CPD para. 107 at
6-8. The overriding concern is not whether the final ratings are
consistent with earlier, individual ratings, but whether they reasonably
reflect the relative merits of the proposals. Cube-All Star Servs. Joint
Venture, B-291903, Apr. 30, 2003, 2003 CPD para. 145 at 11 n.21.
Here, the record confirms that there were strong persistent differences of
opinion among evaluators, and that evaluators were strongly encouraged to
discuss the issues and strive for a consensus during the initial
evaluation. While some degree of consensus was reached, the contracting
officer was fully informed of any remaining disagreement, and the basis
for it. Further, the evaluators are unanimous in stating that they did not
feel any "pressure" in the evaluation of FPRs. Supplemental Agency Report
(Sept. 25, 2006), app. A, Declarations of Individual Technical Panel
Members. Finally, GIV has not identified any substantive flaw in the FPR
ratings, nor has it shown how the "pressure" to reach consensus during the
initial evaluation affected the elimination of GIV from the competitive
range due to its significantly higher price. Accordingly, on the record
here, GIV's assertions regarding CDC's internal deliberations during the
evaluation process provide no basis for sustaining this protest.
GIV also complains that it was not adequately apprised during discussions
that its price was too high. In response, CDC references specific
questions, quoted above, in which CDC stated, among other things, that "It
appears GIV's costs are not reasonable." Agencies are not required to
"spoon-feed" an offeror during discussions. LaBarge Elecs., B-266210, Feb.
9, 1996, 96-1 CPD para. 58 at 6. Rather, discussions must be meaningful;
that is, discussions may not mislead offerors and must identify
deficiencies and significant weaknesses in each offeror's proposal that
could reasonably be addressed in a manner to materially enhance the
offeror's potential for receiving award. PAI Corp., B-298349, Aug. 18,
2006, 2006 CPD para. 123 at 8. Here, as quoted above, the record supports
CDC's contention that GIV was informed during discussions that its price
was too high. CDC's questions adequately informed GIV of CDC's concerns
regarding GIV's price.
Finally, GIV protests that CDC improperly failed to inquire of GIV and
McKesson whether their prices were erroneous. However, GIV has failed to
show any basis for CDC to have been concerned about either McKesson's or
GIV's own pricing. McKesson itself confirmed its prices during the
protest. McKesson's Supplemental Comments (Oct. 23, 2006) at 5-6. On this
record, we deny this aspect of GIV's protest.[8]
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] In its initial protest, GIV raised several grounds of protest which
argued, in essence, that GIV's proposal was excluded from the competitive
range solely on the basis of GIV's high price, and that CDC could not
properly evaluate price under the RFP because CDC had improperly
implemented the Service Contract Act (SCA), and thus had failed to include
applicable wage determinations in the RFP that would be required for
competing offerors to submit proposals in compliance with the SCA. CDC
produced a report on these issues on September 8, but produced requested
documents on several dates. Our Office set a deadline for comments on the
initial agency report on September 25 by 5:30 p.m. Eastern Daylight-Saving
Time (EDT). The protester's comments ultimately arrived by fax at 6:16
p.m. EDT, indisputably after our filing deadline. Counsel for GIV has
submitted a fax machine error report to show that its counsel attempted to
file comments on the report on that date at "17:00" (or 5:00 p.m.) at
which time counsel's machine reported "BUSY." Counsel did not request, and
our Office did not grant, any further extension of the deadline for
comments. Our Bid Protest Regulations provide that when comments from a
protester are not received by the time when due, the protest "shall be
dismissed." 4 C.F.R. sect. 21.3(i) (2006). Therefore, we do not address
the issues raised in the initial protest.
[2] The Vaccines for Children Act also directs CDC to maintain a 6-month
stockpile of the vaccines, an objective that the contract was also
designed to achieve. Contracting Officer's Statement at 2 n.1.
[3] As of February 21, 2006, the due date for initial proposals, the RFP
divided the areas served into three regions: a west region, an east
region, and, as a small business set-aside, the state of Texas, thus
providing the potential to award a separate contract for each region. When
no proposals were received under the small business set-aside, CDC
dissolved the set-aside and added Texas to the west region. RFP amend. 6.
[4] The RFP also stated that CDC would evaluate offerors' small
disadvantaged business participation plans, and offerors' past
performance. RFP amend. 5, at 23-25; RFP amend. 7, at 4-5.
[5] The panel consisted of six members. However, the contract specialist
and the panel chair did not participate in scoring proposals.
[6] GIV received a copy of the competitive range determination listing
GIV's evaluated price on September 8. On September 26, GIV first suggested
that its evaluated price should have been lower. Since GIV did not assert
any error in its evaluated price until more than 10 days after it obtained
that price, its protest regarding that matter is untimely. 4 C.F.R.
sect. 21.2(a)(2).
[7] While this protest was pending, CDC awarded the contract to McKesson.
Thereafter, GIV supplemented its protest to challenge that award.
[8] GIV raises various additional issues, including a claim that
evaluators did not unanimously conclude that McKesson's proposal was
"viable," that pricing should have been evaluated on the basis of
different shipment sizes, and that CDC had an allegedly undisclosed
preference for McKesson's reliance on leveraging its commercial
operations, which functioned as an unstated evaluation criterion. We have
considered all of GIV's arguments, and find them to be without merit.