B-297915.2, CIGNA Government Services, LLC, May 4, 2006

B-297915.2 May 04, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights CIGNA Government Services, LLC protests the award of a contract by the Department of Health & Human Services, Centers for Medicare and Medicaid Services (CMS), to Palmetto GBA, LLC pursuant to request for proposals (RFP) No. CMS-2005-0012 for Medicare claims processing services related to claims from suppliers and beneficiaries of durable medical equipment. CIGNA protests, among other things, that the agency failed to conduct meaningful discussions with CIGNA and permitted Palmetto to materially revise its proposal after final proposal revisions had been submitted. We sustain the protest. View Decision B-297915.2, CIGNA Government Services, LLC, May 4, 2006 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: CIGNA Government Services, LLC File: B-297915.2 Date: May 4, 2006 Craig A. Holman, Esq., Kara L. Daniels, Esq., and David J. Craig, Esq., Holland & Knight LLP, for the protester. Kathleen E. Karelis, Esq., W. Jay DeVecchio, Esq., Kevin Dwyer, Esq., and Richard Arnholt, Esq., Jenner & Block LLP, for Palmetto GBA, LLC, an intervenor. Jeffri Pierre, Esq., Anthony E. Marrone, Esq., and Christine Simpson, Esq., Department of Health & Human Services, 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 Agency's communications with awardee following submission of final revised proposals, during which awardee made various changes to its final proposal submission, including changes to the total level of effort awardee represented it would provide under the contract, constituted discussions and required that the agency similarly conduct discussions with the protester. DECISION CIGNA Government Services, LLC protests the award of a contract by the Department of Health & Human Services, Centers for Medicare and Medicaid Services (CMS), to Palmetto GBA, LLC pursuant to request for proposals (RFP) No. CMS-2005-0012 for Medicare claims processing services related to claims from suppliers and beneficiaries of durable medical equipment.[1] CIGNA protests, among other things, that the agency failed to conduct meaningful discussions with CIGNA and permitted Palmetto to materially revise its proposal after final proposal revisions had been submitted. We sustain the protest. BACKGROUND In December 2003, Congress enacted the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). Among other things, this legislation requires that CMS use competitive procurement procedures, pursuant to the Federal Acquisition Regulation (FAR), to replace the fiscal intermediaries and carriers on whom CMS has historically relied for claims processing services,[2] and who have been selected under other than competitive procedures. The replacement contractors under the MMA are referred to as –Medicare Administrative Contractors— (MACs). Pursuant to the transition, and in contrast to past practice, MACs are also required to comply with the Cost Accounting Standards (CAS). In April 2005, CMS issued RFP No. CMS-2005-0012, seeking proposals, for each of four geographic jurisdictions,[3] to provide specified health insurance benefit administration services, including Medicare claims processing and payment services related to durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). [4] RFP sect. B.1. The procurements for each jurisdiction were conducted as separate competitions, but offerors were permitted to submit proposals for any or all of the jurisdictions. The solicitation provided that the source selection decision for each jurisdiction would be made on the basis of the proposal offering the best overall value to the government, considering cost/price and the following non'cost/price factors, listed in descending order of importance: offeror capability,[5] implementation,[6] quality control plan, corporate experience, past performance, and small disadvantaged business utilization plan. RFP sect. M.4. The solicitation provided that non-cost/price factors, when combined, were significantly more important than cost/price, and that cost/price would not be point scored but would be evaluated for cost realism. RFP sections M.2, M.7. On or before the specified closing date, Palmetto and CIGNA submitted initial proposals for the jurisdiction C contract. Thereafter, technical proposals were evaluated by a technical evaluation board (TEB)[7] and cost/price proposals were evaluated by a business evaluation panel (BEP).[8] Upon completing the evaluation of initial proposals, the evaluation panels provided a summary of the evaluation results to the contracting officer. AR, Tab 24.