B-298962; B-298962.2, Palmetto GBA, LLC, January 16, 2007

B-298962; B-298962.2, Palmetto GBA, LLC, January 16, 2007 TITLE: B-298962; B-298962.2, Palmetto GBA, LLC, January 16, 2007 BNUMBER: B-298962; B-298962.2 DATE: January 16, 2007 ********************************************************* B-298962; B-298962.2, Palmetto GBA, LLC, January 16, 2007 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: Palmetto GBA, LLC File: B-298962; B-298962.2 Date: January 16, 2007 W. Jay DeVecchio, Esq., Kevin C. Dwyer, Esq., Edward Jackson, Esq., and Sharmila Sohoni, Esq., Jenner & Block LLP for the protester. Craig A. Holman, Esq., Kara L. Daniels, Esq., and David J. Craig, Esq., Holland & Knight, LLP, for CIGNA Government Services, LLC, an intervenor. Jeffri Pierre, Esq., and Anthony Marrone, Esq., Department of Health and Human Services, for the agency. Jonathan L. Kang, Esq., and Glenn G. Wolcott, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging agency's cost realism and technical evaluations is denied where the record supports the reasonableness of the agency's determinations. 2. Protest that agency was required to amend solicitation to include performance of optional/specialty services is denied where solicitation did not require offerors to submit proposals for such services and the agency had not yet determined how the optional/specialty services will be obtained. DECISION Palmetto GBA, LLC protests the award of a contract to CIGNA Government Services, LLC, by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS), under request for proposals (RFP) No. CMS-2005-0012 to provide Medicare claims processing and services related to claims for suppliers and beneficiaries of durable medical equipment. Palmetto challenges the agency's cost realism and technical evaluations, and further argues that the agency was required to amend the solicitation to include what Palmetto asserts are changed requirements. We deny 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, and who have been selected under other than competitive procedures. The replacement contractors under the MMA are referred to as "Medicare Administrative Contractors" (MACs).[1] In April 2005, CMS issued RFP No. CMS-2005-0012, seeking proposals, for each of four geographic jurisdictions, to provide specified health insurance benefit administration services, including Medicare claims processing and payment services related to durable medical equipment, prosthetics, orthotics and supplies (DME).[2] RFP sect. B.1. The RFP anticipated the award of a cost-reimbursement plus award-fee contract, with a 1-year base performance period and four 1-year option periods. 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, implementation, quality control plan, corporate experience, past performance, and small disadvantaged business utilization plan.[3] 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. In addition to the claims processing and contractor interface services described above, referred to in the solicitation as "core" services, the solicitation also outlined the following four "optional/specialty" services: data center; medicare electronic data interchange system (MEDIS); national supplier clearinghouse; and data analysis and coding. The solicitation provided that offerors for the DME contracts were required to submit proposals for the data center, and were permitted to submit proposals for any or none of the other optional/specialty services.[4] RFP Cover Letter, April 15, 2005.