ACS State Healthcare, LLC; PharmaCare Government Services, Inc.; PGBA, LLC; Humana Military Healthcare Services, Inc., B-292981; B-292981.2; B-292981.3; B-292981.4; B-292981.5; B-292981.6; B-292981.7; B-292981.8; B-292981.9 B-292981.10, January 9, 2004

ACS State Healthcare, LLC; PharmaCare Government Services, Inc.; PGBA, LLC; Humana Military Healthcare Services, Inc., B-292981; B-292981.2; B-292981.3; B-292981.4; B-292981.5; B-292981.6; B-292981.7; B-292981.8; B-292981.9 B-292981.10, January 9, 2004 TITLE: ACS State Healthcare, LLC; PharmaCare Government Services, Inc.; PGBA, LLC; Humana Military Healthcare Services, Inc., B-292981; B-292981.2; B-292981.3; B-292981.4; B-292981.5; B-292981.6; B-292981.7; B-292981.8; B-292981.9 B-292981.10, January 9, 2004 BNUMBER: B-292981; B-292981.2; B-292981.3; B-292981.4; B-292981.5; B-292981.6; B-292981.7; B-292981.8; B-292981.9 B-292981.10 DATE: January 9, 2004 ********************************************************************** ACS State Healthcare, LLC; PharmaCare Government Services, Inc.; PGBA, LLC; Humana Military Healthcare Services, Inc., B-292981; B-292981.2; B-292981.3; B-292981.4; B-292981.5; B-292981.6; B-292981.7; B-292981.8; B-292981.9 B-292981.10, January 9, 2004 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: ACS State Healthcare, LLC; PharmaCare Government Services, Inc.; PGBA, LLC; Humana Military Healthcare Services, Inc. File: B-292981; B-292981.2; B-292981.3; B-292981.4; B-292981.5; B-292981.6; B-292981.7; B-292981.8; B-292981.9 B-292981.10 Date: January 9, 2004 Robert J. Sherry, Esq., Kathleen M. Paralusz, Esq., Dylan B. Carp, Esq., and Marc R. Baluda, Esq., Kirkpatrick & Lockhart, for ACS State Healthcare, LLC; Gerard R. Doyle, Esq., and Ron R. Hutchinson, Esq., Doyle & Bachman, for PharmaCare Government Services, Inc.; Kathleen E. Karelis, Esq., W. Jay Devecchio, Esq., Robert K. Huffman, Esq., Lisanne S. Cottington, Esq., Edward Jackson, Esq., Christine S. Ricci, Esq., Jeffrey C. Walker, Esq., and Alexa Zevitas, Esq., Miller & Chevalier, for PGBA, LLC; Thomas P. Barletta, Esq., Peter L. Wellington, Esq., Daniel C. Sauls, Esq., Paul R. Hurst, Esq., Michael C. Drew, Esq., Paul I. Lieberman, Esq., and Dianne L. Herz, Esq., Steptoe & Johnson, and Alan C. Brown, Esq., Duane Morris, for Humana Military Healthcare Services, Inc., the protesters. Thomas B. Smith, Esq., Thomas M. Susman, Esq., Scott A. Shepard, Esq., and Ryan M. Malone, Esq., Ropes & Gray; and Clayton S. Marsh, Esq., and Janice C. Forsyth, Esq., for Express Scripts, Inc., the intervenor. Lynn T. Burleson, Esq., and Kenneth S. Lieb, Esq., TRICARE Management Activity, Department of the Defense, for the agency. Sharon L. Larkin, Esq., Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. In negotiated procurement under which the contractor will acquire pharmaceuticals for Department of Defense (DoD) using DoD funds, and where solicitation requests offerors to propose discount rates and dispensing fees for pharmaceuticals in addition to their fixed prices, and provides for evaluation of government*s projected future costs for pharmaceuticals (*Total Expected Government Cost* (TEGC)) as a technical factor, agency reasonably assessed likelihood that offerors could provide pharmaceuticals at their proposed discount rates and dispensing fees; cost realism analysis of offerors* TEGCs was not required, where solicitation did not require such an analysis. 2. Source selection authority (SSA) performed reasonable cost/technical tradeoff in determining the awardee*s proposal for supporting pharmaceutical program represented best value, where the SSA*s judgment, based upon the results of a reasonable, well-documented technical evaluation, is set forth in a detailed decision document that demonstrates the SSA*s understanding of the evaluated strengths and weaknesses of the respective proposals, and that shows a reasonable weighing of the offerors* respective technical and price advantages consistent with the solicitation*s evaluation criteria. DECISION ACS State Healthcare, LLC; PharmaCare Government Services, Inc.; PGBA, LLC; and Humana Military Healthcare Services, Inc. protest the award of a contract to Express Scripts, Inc. (ESI), under request for proposals (RFP) No. MDA906-03-R-0002, issued by the TRICARE Management Activity, Department of the Defense (DoD), for support of the TRICARE Retail Pharmacy (TRRx) program. We deny the protests. BACKGROUND The TRICARE program is a managed health care program implemented by DoD for active duty and retired members of the uniformed services, their families, and survivors. 32 C.F.R. S: 199.17 (2003). TRICARE is a blend of the military*s direct care system of hospitals and clinics (known as Military Treatment Facilities) and the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).