B-296489, Digital Healthcare, Inc., August 24, 2005

B-296489 Aug 24, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Digital Healthcare, Inc. protests the issuance of request for proposals (RFP) No. 500-20-05, by the Department of Veterans Affairs (VA) for the acquisition of insurance identification services. Digital complains that the agency improperly used proprietary information contained in its unsolicited proposal in the current solicitation. We deny the protest. View Decision B-296489, Digital Healthcare, Inc., August 24, 2005 Decision Matter of: Digital Healthcare, Inc. File: B-296489 Date: August 24, 2005 Hilary S. Cairnie, Esq., Melissa M. Nichols, Esq., and Adrien C. Pickard, Esq., Vorys, Sater, Seymour and Pease, LLP, for the protester. Phillipa L. Anderson, Esq., Dennis Foley, Esq., and Philip Kauffman, Esq., Department of Veterans Affairs, for the agency. Linda C. Glass, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Allegation that agency misappropriated information contained in protester's unsolicited proposal and developed specifications based on that information is denied where protester has not met its burden of showing proprietary nature of information allegedly misappropriated. DECISION Digital Healthcare, Inc. protests the issuance of request for proposals (RFP) No. 500-20-05, by the Department of Veterans Affairs (VA) for the acquisition of insurance identification services. Digital complains that the agency improperly used proprietary information contained in its unsolicited proposal in the current solicitation. We deny the protest. In June 2003, Digital submitted an unsolicited contract proposal to each of the federally funded health plan providers, including the Veterans Health Administration (VHA) indicating that it was the sole licensee of various intellectual properties governing the automation of the coordination of benefits (COB) among health plans, and other related procedures in the healthcare finance area. Unsolicited Proposal at 2. Digital stated that it was therefore uniquely situated to address VHA's need to identify and bill other sources of insurance coverage for VHA patients. Digital stated that its proposal differed from other approaches to the problem in that other vendors propose to –poll— a small number of local payers and that the proposal to poll only a handful of local payers will yield an improvement, but not a very good result relative to the automated polling of all payers. Digital identified a number of advantages to its automated COB process. Digital stated that no other system combined these functions. Digital further stated that its e-commerce process as described in its unsolicited proposal was proprietary to Digital by virtue of its patents, non-competition agreements, and other intellectual property. In November 2003, the VA responded to Digital and stated that its unsolicited proposal was not considered unique in nature. Agency Report (AR) Tab 3, Letter to Protester. Specifically, the agency concluded that the proposal itself indicated that these services are available from other companies albeit not to the scope Digital proposed. AR, Tab 3, Determination and Findings of Unsolicited Proposal. The agency also stated that the Digital proposal only contained –slight— details; there was no identification of purported patented application and according to letters from Digital's technical support, intellectual applications belong to third party holders. Id., encl., Determination of Unsolicited Proposals. After receipt of a request for the acquisition of insurance identification services, the VA contracting officer conducted a market survey to determine whether potential service disabled veteran owned, small business firms with either General Service Administration or VA Federal Supply Schedule contracts were available to supply the requirement as a commercial item. Contracting Officer's Statement at 1. The contracting officer received several responses from potential sources for the required services. On April 12, 2005, request for quotations No. 500-14-05 was issued to all vendors who responded to the market survey. However, all responses to that solicitation were rejected on the basis that they did not meet the minimum requirements. The agency subsequently cancelled that solicitation and revised the requirement. On April 29, 2005, the current RFP was issued for the award of a fixed-price, indefinite-quantity/indefinite-delivery services contract for a base year with two 1-year option periods. The services described by the solicitation were as follows: The overall scope of services is the establishment of an off-site insurance identification unit. Its purpose shall be to identify insurance for veterans without insurance or unknown insurance.