Unisys Corporation, B-292679; B-292679.4, November 21, 2003

Unisys Corporation, B-292679; B-292679.4, November 21, 2003 TITLE: Unisys Corporation, B-292679; B-292679.4, November 21, 2003 BNUMBER: B-292679; B-292679.4 DATE: November 21, 2003 ********************************************************************** Decision Matter of: Unisys Corporation File: B-292679; B-292679.4 Date: November 21, 2003 E. Sanderson Hoe, Esq., and Lisa M. Norrett, Esq., McKenna Long & Aldridge, and Charlotte D. Young, Esq., Unisys Corporation, for the protester. Steven S. Diamond, Esq., Walter F. Zenner, Jr., Esq., Marc A. Stanislawczyk, Esq., W. Susanne Addy, Esq., Waltraut S. Addy, Esq., and Joseph M. Catoe, Esq., Arnold & Porter, for Wisconsin Physicians Service Insurance Corporation, an intervenor. Ellen C. Bonner, Esq., and Michael E. Jonasson, Esq., Department of Defense, Tricare Management Agency, for the agency. Glenn G. Wolcott, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Agency reasonably evaluated protester's proposal as "high" risk, based on protester's proposal of staffing levels that were significantly lower than historical levels, and protester's failure to meaningfully explain how it would successfully perform the contract requirements with the level of staff proposed. 2. Agency's discussions with protester were meaningful and adequate where agency provided written discussion questions to protester that reasonably identified the agency's concerns, and subsequently conducted oral discussions during which the agency expanded on the identified concerns. 3. In procurement where non-price factors were significantly more important than price, agency's price/technical tradeoff was reasonable and adequately documented where source selection decision memorandum expressly acknowledges protester's price advantage, references multiple evaluated strengths in the awardee's proposal, and concludes that the higher price is more than justified by the technical superiority of awardee's proposal. DECISION Unisys Corporation protests the Department of Defense (DOD), Tricare Management Agency's (TMA) award of a contract to Wisconsin Physicians Service Insurance Corporation (WPS) under request for proposals (RFP) No. MDA906-02-R-0007. This solicitation sought proposals to provide health care claims processing and related services for military members, and their dependents, who are eligible for both Medicare and Tricare benefits. Unisys challenges various aspects of the agency's source selection process, including the evaluation of proposals under various technical evaluation subfactors, the adequacy of discussions, and the adequacy of support for the agency's price/technical tradeoff. We deny the protest. BACKGROUND DOD provides health care to active-duty and retired members of the seven uniformed services, and to their dependents, through an extensive network of military treatment facilities (MTFs), supplemented by a network of civilian health care providers operating under managed care support (MCS) contracts with DOD. In the early 1990s, DOD implemented the Tricare program, which provides three basic health care options: a managed care program, a preferred-provider option, and a fee-for-service option. The total number of beneficiaries currently eligible for Tricare coverage is approximately 8.7 million. A portion of these beneficiaries (approximately 1.5 million) is also entitled to receive Medicare benefits due to their age (65 or older) or poor health; this portion of the beneficiary population is generally referred to as "dual eligible" beneficiaries. Prior to October 2001, Tricare beneficiaries who became eligible for Medicare lost their eligibility for Tricare coverage. Effective October 2001, Congress enacted legislation, commonly referred to as "Tricare for Life" (TFL), which restored Tricare coverage for Tricare beneficiaries who are also eligible for Medicare. Under the statutory scheme, Medicare coverage is primary and Tricare coverage is secondary.[1] In response to the TFL legislation, DOD modified the then-ongoing MCS contracts to incorporate claims processing services for the dual eligible beneficiary population. Pursuant to these modifications, WPS, acting as a subcontractor to an MCS prime contractor, has been processing a portion of the dual eligible beneficiary claims; Unisys has had no involvement in claims processing under the MCS contracts. The prior MCS contracts have expired or will expire soon, and have been or will be replaced by the "next generation" of Tricare contracts, frequently referred to as "T-Nex" contracts. In replacing the expiring contracts, and as a part of a broader transformation of DOD's military health care system, DOD has made various program changes, including consolidation of its current eleven Tricare regions into three regions.