MCI Diagnostic Center, LLC (36C26324R0072)

B-422777,B-422777.2 Oct 21, 2024 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights (SDVOSB) of Richardson, Texas, protests the exclusion of its proposal from the competition, under request for proposals (RFP) No. 36C26324R0072, issued by the Department of Veterans Affairs (VA) for laboratory testing services. The protester argues that the agency unreasonably evaluated its technical proposal. In addition, MCI alleges that the VA's price reasonableness analysis of its proposal was unreasonable. We deny the protest. View Decision Decision Matter of: MCI Diagnostic Center, LLC File: B-422777; B-422777.2 Date: October 21, 2024 Amy C. Hoang, Esq., Erica L. Bakies, Esq., and Sarah E. Barney, Esq., Seyfarth Shaw LLP, for the protester. Jared Levin, Esq., Department of Veterans Affairs, for the agency. Heather Weiner, Esq., and Jennifer D. Westfall-McGrail, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that the agency’s determination of price reasonableness was unreasonable is denied where the agency compared the protester’s price to an independent government estimate that was based on the agency’s historical costs for the requirement and a reasonable estimate regarding increased future usage. DECISION MCI Diagnostic Center, LLC, a service-disabled veteran-owned small business (SDVOSB) of Richardson, Texas, protests the exclusion of its proposal from the competition, under request for proposals (RFP) No. 36C26324R0072, issued by the Department of Veterans Affairs (VA) for laboratory testing services. The protester argues that the agency unreasonably evaluated its technical proposal. In addition, MCI alleges that the VA’s price reasonableness analysis of its proposal was unreasonable. We deny the protest. BACKGROUND Using the procedures of Federal Acquisition Regulation (FAR) part 15, the agency issued the RFP on May 21, 2024, as a set-aside for SDVOSBs. Agency Report (AR), Exh. 3, RFP at 17.[1] The solicitation seeks medical laboratory and testing analysis services to support the VA facilities within Veterans Integrated Service Network (VISN) 23. Id. The RFP contemplated the award of a fixed-price, indefinite-delivery, indefinite-quantity contract with a 5-year period of performance. RFP at 11, 17. The RFP provided for award on a best-value tradeoff basis considering the following factors: technical excellence, past performance, and price. RFP at 89. Technical excellence was considered equal to past performance, and when combined, these factors were significantly more important than price. Id. at 90. The solicitation also advised that the procurement would be conducted using a tiered evaluation, with the following tiers: (1) SDVOSB concerns, (2) Veteran-owned, small business concerns (VOSB), (3) all other small business concerns with 8(a) and historically underutilized business zone (HubZone) businesses having priority, and (4) large business concerns. RFP at 90. The agency received proposals from four SDVOSB offerors, including MCI. AR, Exh. 5, Source Selection Decision (SSD) at 1; COS at 2. The agency rejected two of the proposals for failing to comply with the solicitation’s terms. AR, Exh. 5, SSD at 1. The agency then conducted technical and price evaluations of the remaining two SDVOSB proposals. Id. at 2-8. Both proposals were found to be unacceptable under the technical excellence factor. Id. As relevant here, the agency found MCI’s technical proposal unacceptable overall based on numerous deficiencies and significant weaknesses assessed to MCI’s proposal under this factor.[2] Id. In evaluating price, the agency compared MCI’s overall price and its price for each year of performance to the overall and annual prices in the agency’s independent government cost estimate (IGCE). Id. at 4. The agency found that MCI’s price for each year, as well as MCI’s overall price, were 30.49 percent above the IGCE price. Id. As such, the agency found that it could not determine MCI’s proposed price fair and reasonable. Id. Because the agency could not award to any of the SDVOSB proposals, the SSA determined that it was in the best interest of the government to close the SDVOSB/VOSB[3] tier of evaluations and proceed with reviewing the next tier of evaluations. Id. at 8. Thereafter, on July 16, 2024, the agency issued unsuccessful offeror notices to all four SDVOSB offerors, which included a written pre-award debriefing in accordance with the procedures of FAR section 15.505. COS at 2-3. On July 25, MCI filed the instant protest with our Office, challenging the agency’s determination to exclude MCI’s proposal from the competition. DISCUSSION MCI contends that the agency conducted an unreasonable and inadequate price reasonableness analysis, arguing that the agency relied on a flawed IGCE to determine that MCI’s proposed price was not fair and reasonable. Comments & Supp. Protest at 1‑7.