Health Net Federal Services, LLC (HT9402-20-R-0005)

B-421405.2,B-421405.3 Aug 04, 2023 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Health Net Federal Services, LLC, of Sacramento, California, protests the award of a contract to TriWest Healthcare Alliance Corporation, of Phoenix, Arizona, under request for proposals (RFP) No. HT9402-20-R-0005 issued by the Department of Defense (DOD), Defense Health Agency (DHA) for managed healthcare support services for the TRICARE program in the western region of the United States. The protester alleges that the agency erred in its evaluation and in the conduct of discussions, and that the awardee made multiple false representations concerning its small business subcontracting plan. We deny the protest. View Decision 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: Health Net Federal Services, LLC File: B-421405.2; B-421405.3 Date: August 4, 2023 Amy L. O’Sullivan, Esq., Robert J. Sneckenberg, Esq., Cherie J. Owen, Esq., James G. Peyster, Esq., William B. O’Reilly, Esq., Zachary H. Schroeder, Esq., Issac D. Schabes, Esq., and David H. Favre III, Esq., Crowell & Moring LLP, for the protester. Robert S. Ryland, Esq., H. Boyd Greene, Esq., and Ashley Pincock, Esq., Kirkland & Ellis LLP, and Marcia G. Madsen, Esq., Luke Levasseur, Esq., Cameron R. Edlefsen, Esq., and Evan C. Williams, Esq., Mayer Brown LLP, and Robert J. Rothwell, Esq., Robert D. Vander Lugt, Esq., Amanda J. Dietrick, Esq., and Jenny J. Yang, Esq., Little, Rothwell, and Vander Lugt PLLC, for TriWest Healthcare Alliance Corporation, the intervenor. Michael R. Bibbo, Esq., Morgan Hilgendorf, Esq., Dennis A. Dyke, Esq., Jason Smith, Esq., Justin Dalton, Esq., Bradley Richardson, Esq., Erik Troff, Esq., and Song Kim, Esq., Department of Defense, for the agency. Michael Willems, Esq., and Evan D. Wesser, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest alleging that agency misevaluated proposals and made an unreasonable source selection decision is denied where the record shows that the agency’s evaluation was reasonable and consistent with the terms of the solicitation. 2. Protest that agency engaged in misleading discussions by raising several weaknesses early in discussions, but failing to raise them again in subsequent rounds of discussions is denied where the record shows that the agency raised the weaknesses several times and made no representations that might lead the protester to believe they were resolved. 3. Protest that the owners of an other-than-small business may not be excluded from a small business subcontracting plan as affiliates because they cannot meet the tests for affiliation in the Small Business Administration’s (SBA) regulations is denied, because the solicitation adopted the Federal Acquisition Regulation’s (FAR) general definition of affiliates rather than the SBA’s definition, and the agency’s interpretation of the relevant FAR provision is reasonable. 4. Protest alleging material misrepresentations by awardee is denied where the record establishes that the disputed statements were not false statements, but represented, at worst, unacceptable aspects of the awardee’s proposal that were subsequently corrected during discussions or otherwise were minor inconsistencies that had no bearing on the agency’s evaluation. DECISION Health Net Federal Services, LLC, of Sacramento, California, protests the award of a contract to TriWest Healthcare Alliance Corporation, of Phoenix, Arizona, under request for proposals (RFP) No. HT9402-20-R-0005 issued by the Department of Defense (DOD), Defense Health Agency (DHA) for managed healthcare support services for the TRICARE program in the western region of the United States. The protester alleges that the agency erred in its evaluation and in the conduct of discussions, and that the awardee made multiple false representations concerning its small business subcontracting plan. We deny the protest. BACKGROUND DOD provides healthcare to approximately 9 million military members and their families both by providing healthcare directly at military hospitals or clinics and by purchasing healthcare services on the open market through the TRICARE program. Contracting Officer’s Statement (COS) at 1; Protest at 1-2. To provide these services, the TRICARE program relies on “managed care support” contracts, like the one at issue in this protest. Id. These contracts involve providing a suite of services for TRICARE beneficiaries analogous to the services provided by a conventional commercial health insurance provider: the contractor establishes and maintains networks of healthcare providers; processes claims; and provides customer service to beneficiaries. Id.