Walsh Distribution, Inc.; Walsh Dohmen Southeast, B-281904; B-281904.2, April 29, 1999

Walsh Distribution, Inc.; Walsh Dohmen Southeast, B-281904; B-281904.2, April 29, 1999 TITLE: Walsh Distribution, Inc.; Walsh Dohmen Southeast, B-281904; B-281904.2, April 29, 1999 BNUMBER: B-281904; B-281904.2 DATE: April 29, 1999 ********************************************************************** Walsh Distribution, Inc.; Walsh Dohmen Southeast, B-281904; B-281904.2, April 29, 1999 Decision Matter of: Walsh Distribution, Inc.; Walsh Dohmen Southeast File: B-281904; B-281904.2 Date: April 29, 1999 Scott M. Heimberg, Esq., Thomas P. McLish, Esq., and Andrea T. Vavonese, Esq., Akin, Gump, Strauss, Hauer & Feld, for the protesters. Frank M. Rapoport, Esq., Charles H. Carpenter, Esq., Daniel I. Prywes, Esq., and Donald J. Carney, Esq., Pepper Hamilton, for AmeriSource Corporation, an intervenor. Maura C. Brown, Esq., Melbourne A. Noel, Esq., Philip S. Kauffman, Esq., and Phillipa L. Anderson, Esq., Department of Veterans Affairs, for the agency. Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Agency reasonably rated protesters' and awardee's proposals similarly under past performance factor where (1) although awardee had several minor past performance problems, they had been resolved by consolidation of firm's operations; (2) one protester, while having no negative information relating to its past performance, had never performed on a scale comparable to that required under the RFP; and (3) the second protester's proposal was rated slightly higher than the awardee's, but only due to the limited geographic area and dollar volume represented by its offer. 2. Agency's decision to make award to firm offering significant cost savings was unobjectionable where protester's and awardee's proposals were rated similarly under all non-cost criteria, and record shows agency was unwilling to pay cost premium for protester's slight advantage in past performance. DECISION Walsh Distribution, Inc., and Walsh Dohmen Southeast protest the award of a contract to AmeriSource Corporation under request for proposals (RFP) No. M5-Q2-99, issued by the Department of Veterans Affairs (VA) for the distribution of pharmaceuticals. The protesters maintain that the agency misevaluated proposals and improperly made award to AmeriSource. We deny the protests. The RFP contemplated the award of one or more fixed-price contracts to distribute the VA's pharmaceutical requirements for a base year and four 1-year options. The RFP was issued in connection with the agency's Pharmaceutical Prime Vendor (PPV) program under which the PPV delivers pharmaceutical products ordered by one of several agencies (including VA, parts of the Department of Defense, the Bureau of Prisons, the Department of Health and Human Services and the Immigration and Naturalization Service) from various Federal Supply Schedule (FSS) contracts, VA national pharmaceutical contracts, basic ordering agreements or other government contract vehicles. The contract essentially provides a means for approximately 568 medical and pharmaceutical clearinghouse facilities to have their pharmaceutical requirements delivered in a timely manner. (The agency estimates that these facilities collectively will order slightly more than $1.5 billion in pharmaceutical products during each contract year.) Firms could submit offers for one or more regions, or for the entire national requirement. Prices were to be expressed as a percentage above or below the FSS or national contract prices. The evaluation factors, in descending order of importance, were past performance, technical approach and price. RFP at 77. Within the technical approach area, two equally-weighted subfactors were specified, implementation plan and distribution and logistics management.[1] Id. The agency employed an adjectival rating system (exceptional, highly acceptable, acceptable, minimally acceptable or unacceptable) to assess proposals under the non-price factors. The agency received 13 initial offers, 7 of which were included in the competitive range. The agency engaged in discussions with the competitive range offerors and solicited final proposal revisions (FPR). After receipt and evaluation of the FPRs, the agency made award to AmeriSource for all but 4 regions which are not at issue in this protest. Walsh Distribution's protest concerns region Nos. 6, 9, 19, 21 and 22; Walsh Dohmen's protest concerns region Nos. 3 and 18.[2] PAST PERFORMANCE In the past performance area AmeriSource's proposal was rated highly acceptable, Walsh Dohmen's exceptional and Walsh Distribution's highly acceptable. Walsh Distribution asserts that, since its references all provided outstanding recommendations, its proposal should have been rated exceptional. Walsh Distribution also maintains that its past performance was superior to AmeriSource's, and that this should have been reflected in a rating higher than AmeriSource's.