Southwest Anesthesia Services, B-279176.2, July 21, 1998

B-279176.2 Jul 21, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Southwest contends that the cancellation lacked a reasonable basis and was motivated by the contracting agency's desire to avoid making an award to Southwest and having our Office render a decision on Southwest's previous protest. Was not selected for award. If a different awardee was selected. The agency had decided to cancel the RFP and perform the anesthesia services in-house following what the agency advises was the March 26 anesthesia-related death of a pediatric patient at the Santa Fe Indian Hospital while Anestat was providing anesthesia services. /1/ Southwest argues that. It can provide better quality services at a lower cost than the agency will obtain in-house. That the agency's stated reasons for the cancellation of the solicitation and determination to perform the services in-house were pretexts to avoid our review of Southwest's initial protest to our Office (and as additional retaliation for having filed the protest) and to avoid awarding Southwest the contract. View Decision Matter of: Southwest Anesthesia Services File: B-279176.2 Date: July 21, 1998 DIGEST Attorneys DECISION Southwest Anesthesia Services protests the cancellation of request for proposals (RFP) No. 97-10-VZ, issued by the Indian Health Service, Department of Health and Human Services, for anesthesia services at the Santa Fe Indian Hospital, and the agency's determination to perform the services in-house. Southwest contends that the cancellation lacked a reasonable basis and was motivated by the contracting agency's desire to avoid making an award to Southwest and having our Office render a decision on Southwest's previous protest. We deny the protest. The president and co-owner of Southwest has provided anesthesia services to the Santa Fe Indian Hospital since 1981 as a Certified Registered Nurse Anesthetist. His previous long-term contract with the hospital expired on October 31, 1996, and thereafter the agency ordered anesthesia services from Southwest by purchase order on a month-to-month basis. During 1997, the agency decided to solicit the services on a long-term basis, issued the RFP at issue here, and requested proposals by October 1, 1997. Southwest submitted a proposal by the due date, participated in discussions, and submitted a best and final offer (BAFO) at the request of the agency, but was not selected for award. Instead, the agency awarded the contract to Anestat, Inc., which commenced performance on February 1, 1998. Southwest filed a protest with our Office on February 3, contending that the agency acted improperly in not awarding the contract to Southwest. Specifically, Southwest asserted that agency personnel exhibited animosity and retaliated against Southwest for revealing alleged contracting and fiscal improprieties, such as the delayed issuance of purchase orders and subsequent late payments for services ordered, which occurred during Southwest's continued performance of the anesthesia services after the expiration of its previous long-term contract. On February 13, the agency authorized continued performance of the contract by Anestat, notwithstanding Southwest's protest, because of the critical nature of the services to the patients at the hospital. The agency informed our Office on March 3 that in reviewing Southwest's protest it discovered inadequacies in the evaluation and award selection process. The agency proposed to take corrective action by reevaluating BAFOs, performing a new source selection, and, if a different awardee was selected, terminating the contract with Anestat for the convenience of the government. Since these proposed actions rendered the protest academic, our Office dismissed Southwest's protest on March 6. Southwest filed a new protest on May 11 because, instead of taking the promised corrective action, the agency had decided to cancel the RFP and perform the anesthesia services in-house following what the agency advises was the March 26 anesthesia-related death of a pediatric patient at the Santa Fe Indian Hospital while Anestat was providing anesthesia services. /1/ Southwest argues that, based on its long affiliation with the hospital, it can provide better quality services at a lower cost than the agency will obtain in-house, and that the agency's stated reasons for the cancellation of the solicitation and determination to perform the services in-house were pretexts to avoid our review of Southwest's initial protest to our Office (and as additional retaliation for having filed the protest) and to avoid awarding Southwest the contract. The agency responds that it canceled the solicitation and made the decision to obtain the anesthesia services in-house due to a reassessment of its needs resulting from the findings and recommendations in the report prepared by an agency medical reviewer investigating the March 26 patient death.