The Arora Group, Inc., B-277674, November 10, 1997

B-277674 Nov 10, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency's conclusion that G&A budget was inadequate to retain employees was premised on agency's miscalculation of amount of that budget. The minimum healthcare worker qualifications were to be evaluated on a "Go/No-Go" basis. Past performance was to be evaluated on the basis of the merits of each offeror's corporate experience. The RFP provided that merit of an offeror's past performance was significantly more important than price. That the closer the merits of the offerors' past performances were to one another. An attempt will be made to clarify suspected unrealistic pricing with the offeror during discussions. Will be addressed in the evaluation of the offeror's past performance. Closing date. [1] Technical evaluations were conducted and concerns were identified in both Arora's and Saratoga's proposals. View Decision Matter of: The Arora Group, Inc. File: B-277674 Date: November 10, 1997 * Redacted Decision DIGEST Attorneys DECISION The Arora Group, Inc. protests the award of a fixed-price contract to Saratoga Medical Center, Inc. under request for proposals (RFP) No. N62645-96-R-0032, issued by the Naval Medical Logistics Command for the services of 10 pharmacists for the National Naval Medical Center, Bethesda, Maryland. Arora principally contends that the agency erred in its price realism analysis of Arora's proposal and deviated from the RFP's source selection criteria. We sustain the protest. The RFP, issued on August 22, 1996, as a competitive 8(a) set-aside under the Small Business Act, 15 U.S.C. Sec. 637(a) (1994), sought offers to provide the services of 10 full-time pharmacists and 5 optional pharmacists for a base period with four option periods, for a total possible performance term of 5 years. The RFP provided that award would be made to the responsible offeror whose proposal, conforming to the specified minimum healthcare worker qualifications, offered the government the best combination of past performance and price. To be considered for contract award the offeror had to provide proof that it would provide at least 10 individual healthcare workers who satisfied the specified minimum healthcare worker qualifications. The minimum healthcare worker qualifications were to be evaluated on a "Go/No-Go" basis. Past performance was to be evaluated on the basis of the merits of each offeror's corporate experience. The RFP provided that merit of an offeror's past performance was significantly more important than price, but that the closer the merits of the offerors' past performances were to one another, the greater the importance of price would be in the award decision. The RFP advised offerors that price realism would be assessed as follows: Realism. An attempt will be made to clarify suspected unrealistic pricing with the offeror during discussions. Unrealistically low cost estimates and/or inconsistencies between the technical and price proposal, which result in a suspected understatement of the costs or misunderstanding of the requirements, will be addressed in the evaluation of the offeror's past performance. The agency received eight proposals by the September 24, 1996, closing date. [1] Technical evaluations were conducted and concerns were identified in both Arora's and Saratoga's proposals. Both proposals were rated "Good" under the past performance evaluation factor. The price proposals were evaluated to determine reasonableness and realism by comparing the proposed prices to each other, to the Navy's market survey, and to the offeror's own market survey information, which was required to be submitted with proposals. The proposed escalation rates were compared to the annual 3-percent rate which the agency understood had been recommended in Federal Acquisition Circular (FAC) 90-23. [2] Saratoga proposed an average healthcare worker compensation rate of $[deleted] hour for the base period, and annual salary escalation of [deleted] percent. Saratoga's compensation rate was determined to be unrealistically low based on a comparison with the government market survey, the offeror's own market survey, and the certificates of availability provided by the offeror. The protester proposed an average compensation rate of $[deleted] per hour for the base period with no escalation for the option years. Based on its market survey and FAC 90-23, the Navy projected that the hourly wage for pharmacists in the area would range from $[deleted] to $[deleted] per hour during the last of the option periods covered by the RFP.