AdvanceMed Corporation

B-414373 May 25, 2017 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights AdvanceMed Corporation, of Reston, Virginia, protests the issuance of a task order to Health Integrity, LLC, of Easton, Maryland, under request for proposals (RFP) No. HHSM-500-2016-RFP-0027, issued by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS), for Medicare and Medicaid program integrity services. The protester challenges the agency's cost realism analysis and best-value decision. We sustain the protest. We sustain the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This version has been approved for public release. Decision Matter of:  AdvanceMed Corporation File:  B-414373 Date:  May 25, 2017 Daniel P. Graham, Esq., Caroline E. Colpoys, Esq., and Tyler E. Robinson, Esq., Vinson & Elkins LLP, for the protester. Daniel J. Kelly, Esq., David Himelfarb, Esq., and Lillian M. Mezynski, Esq., McCarter & English, LLP, for Health Integrity, LLC, the intervenor. Christian P. Maimone, Esq., and Linda Santiago, Esq., Department of Health and Human Services, for the agency. Elizabeth Witwer, Esq., and Jennifer D. Westfall-McGrail, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging the agency’s cost realism evaluation is sustained where the agency failed to recognize and reasonably assess the likely costs stemming from the awardee’s proposed technical approach. DECISION AdvanceMed Corporation, of Reston, Virginia, protests the issuance of a task order to Health Integrity, LLC, of Easton, Maryland, under request for proposals (RFP) No. HHSM-500-2016-RFP-0027, issued by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS), for Medicare and Medicaid program integrity services.  The protester challenges the agency’s cost realism analysis and best-value decision. We sustain the protest. BACKGROUND The agency issued the solicitation on July 13, 2016, to contractors holding one of CMS’s Unified Program Integrity Contract (UPIC) indefinite-delivery, indefinite-quantity (IDIQ) contracts.  The solicitation sought proposals to support the agency’s fraud, waste, and abuse detection, deterrence, and prevention activities for Medicare and Medicaid claims within the Western Jurisdiction.[1]  RFP, § B.1, at 3; RFP, Attach. J.1, SOW, at 1.  The solicitation contemplated the award of a cost-plus-award-fee (CPAF) task order for a base year and four 12‑month options.  RFP, § B.4, at 3; RFP, Amend. 2, § F.2. The solicitation provided for award on a best-value basis consisting of cost and five non‑cost evaluation factors.  RFP, § M.2, at 33-34.  When combined, the non-cost factors were significantly more important than cost.  RFP, § M.3, at 34.  In this respect, the solicitation provided that “the Government is more concerned with obtaining superior technical/management features than with making an award at the lowest overall cost to the Government.”  RFP, § M.2, at 33.  At the same time, the solicitation informed offerors that “the Government will not make an award at a significantly higher overall cost to the Government to achieve slightly or moderately superior technical or management features.”  Id. The non-cost factors were as follows, in descending order of importance:  (1) accomplishing and integrating functional requirements--scenario responses; (2) key personnel and staffing plan; (3) past performance; (4) small business utilization; and (5) Section 508 compliance.  RFP, § M.3, at 34.  In rating the non-cost factors, the solicitation provided that the agency would assign one of the following adjectival ratings:  exceptional, very good, satisfactory, marginal, or unsatisfactory.  RFP, § M.3, at 34‑35.  The solicitation further provided that the agency would assign an overall adjectival rating that would reflect how well the offeror’s technical proposal meets the solicitation requirements.  RFP, §§ M.2, M.3, at 33-34. In evaluating cost, the solicitation stated: The business proposals will be analyzed and evaluated by the Government to determine the reasonableness and the realism of the proposed cost/price.  The purpose of this cost realism analysis will be to determine if the Offeror’s proposed costs demonstrate the Offeror understands the Government’s requirements and if the proposed costs are consistent with the various elements of the Offeror’s technical proposal.  The Offeror’s Business Proposal will also be evaluated based on the Offeror’s potential impact to the competitive pool and risk (financial, etc.). RFP, § M.5, at 37.  The concept of “risk,” as it was used to evaluate both the technical and business proposals, was defined as “the likelihood that the Government will be negatively impacted by the Offeror’s failure to meet the negotiated business, technical, management, sche...