B-298438, United Medical Systems-DE, Inc., September 27, 2006

B-298438 Sep 27, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights United Medical Systems-DE, Inc. (UMS) protests the Department of Veterans Affairs' (VA) award of a contract to AKSM Guild, Inc. under request for proposals (RFP) No. 246-06-02587, for the rental of urology equipment and a technician for the operating room at VA's medical center in Salem, Virginia. UMS primarily alleges that the agency unreasonably evaluated its proposed price. We deny the protest. View Decision B-298438, United Medical Systems-DE, Inc., September 27, 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: United Medical Systems-DE, Inc. File: B-298438 Date: September 27, 2006 Tenley A. Carp, Esq., Cohen Mohr LLP, for the protester. Dennis Foley, Department of Veterans Affairs, for the agency. Peter Verchinski, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency improperly evaluated protester's proposed price for laser system is denied where record shows that (1) evaluation was based on only firm, fixed unit price set forth in proposal, and (2) alternate pricing in proposal--which, contrary to solicitation's pricing scheme, consisted of a range of prices based on [deleted] different sized fibers used with the laser--would have resulted in even higher evaluated price, since evaluation would have to be based on highest-priced fiber in order to reflect potential cost to government. DECISION United Medical Systems-DE, Inc. (UMS) protests the Department of Veterans Affairs' (VA) award of a contract to AKSM Guild, Inc. under request for proposals (RFP) No. 246-06-02587, for the rental of urology equipment and a technician for the operating room at VA's medical center in Salem, Virginia. UMS primarily alleges that the agency unreasonably evaluated its proposed price. We deny the protest. VA first issued a solicitation for these services as a total small business set-aside (RFP No. 246-06-02422) in November 2005. UMS submitted a proposal, but VA excluded the proposal from the competition on the basis that UMS was not a small business. VA then made award to AKSM, the only other offeror. On December 14, UMS filed a challenge to AKSM's small business size status, and the Small Business Administration (SBA) subsequently found AKSM to be other than small. Despite this finding, VA determined that it was not in the best interests of the government to terminate AKSM's contract. UMS challenged this determination in a protest filed with our Office, in response to which VA took corrective action by terminating the contract and recompeting the requirement. We thereafter dismissed UMS's protest as academic. (B-297940, Feb. 17, 2006). On March 15, 2006, VA issued the current RFP, without the small business set-aside, which provided for award for a base year, with 2 option years, to the firm whose proposal offered the –best value— to the government, considering technical, past performance, and price factors. The price schedule called for offerors to fill in blanks with unit and total prices for three items: a Holmium YAG laser system, standby charges for the laser system, and an extracorporeal shock wave lithotripter (ESWL). The base and option year prices were to be added to determine a total evaluated price. UMS and AKSM again were the only two firms to submit proposals. Regarding prices for the YAG laser system, UMS's proposal listed, in the appropriate blanks to the right of the item description, a unit price of $1,325 for the system and a total price of $15,900 (the price for 12 units) for the base year. In addition to the blanks next to the item description, the pricing sheet also contained another blank under the description, in which offerors were again to fill in the unit price for each item. Here, UMS did not write $1,325 for the laser system, but instead wrote [deleted] (emphasis in original), and then added [deleted] additional lines containing prices for [deleted] different size fibers (ranging from [deleted] to [deleted]). UMS repeated this pricing scheme for the YAG laser system for each of the option years, changing only the total prices to reflect the different number of units in the option years (25 units for each year). In contrast, AKSM's proposal listed a unit price of $900 for the YAG laser system in both the blank next to the description and the blank below the description. Regarding prices for the standby charges, UMS's proposal listed, in the appropriate blanks to the right of the item description, a unit price of $250 for standby charges, and a total price of $1,250 (the price for 5 units) for the base year. In the blank under the item description, UMS again listed $250, but included the phrase [deleted] (emphasis in original) after the unit price.