American Correctional Healthcare, Inc. (15BFA025R00000055)

B-424391 Jul 06, 2026 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights American Correctional Healthcare, Inc., a small business of Fort Worth, Texas, challenges the terms of request for proposals (RFP) No. 15BFA025R00000055 issued by the Department of Justice, Federal Bureau of Prisons, for medical services at a federal correctional institution (FCI) located in Cumberland, Maryland. The protester argues that the solicitation's pricing terms are unreasonable. 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 version has been approved for public release. Decision Matter of: American Correctional Healthcare, Inc. File: B-424391 Date: July 6, 2026 H. Todd Whay, Esq., and Ian Cronogue, Esq., Baker, Cronogue, Tolle & Werfel, LLP, for the protester. Loneryl Burns, Esq., William D. Robinson, Esq., Kristina Sullivan, Esq., Clint Gerdine, Esq., and David M. Tatarsky, Esq., Department of Justice, 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 Protest challenging solicitation pricing benchmark is denied where the benchmark is reasonably related to the services to be procured, and the protester cannot articulate a reasonable possibility of competitive prejudice. DECISION American Correctional Healthcare, Inc., a small business of Fort Worth, Texas, challenges the terms of request for proposals (RFP) No. 15BFA025R00000055 issued by the Department of Justice, Federal Bureau of Prisons, for medical services at a federal correctional institution (FCI) located in Cumberland, Maryland. The protester argues that the solicitation's pricing terms are unreasonable. We deny the protest. BACKGROUND The agency issued the solicitation on March 9, 2026, seeking to award a single contract for comprehensive medical services for the FCI at Cumberland, which principally includes specialized medical services that cannot be provided on site. Memorandum of Law (MOL) at 1, 9. The protester is the incumbent contractor providing medical services at FCI Cumberland. Protest at 2. Under the incumbent contract, the protester provides medical services to the FCI using hospitals located in Maryland, Pennsylvania, and West Virginia, but 90 percent of the services provided by the incumbent are provided at Maryland hospitals. Protest at 5-6; but see Agency Report (AR), Tab 17, RFP, attach. 6, Technical Proposal Summary Sheets by Hospital Networks (requiring each offeror to propose the specific provider network(s) it would use in performance of the contract). Prior to issuing the solicitation in this case, the agency conducted significant market research and issued a sources sought questionnaire (SSQ) on SAM.gov to prospective offerors.[1] MOL at 6-9. Relevant to this protest, the SSQ included estimated medical service types and quantities based on incumbent contract performance. Id. The SSQ also explained that, at the time it was issued, the agency anticipated that the solicitation would require price proposals to be calculated based on Medicare benchmarks for Core-Based Statistical Area[2] (CBSA) 21, Maryland. Id. The SSQ explained that the use of Medicare benchmarks for pricing neither represented an intention to participate in the Medicare program nor to restrict offerors' pricing approaches, but rather to provide a common benchmark for comparison in the agency's price evaluation. Id. Following additional market research, the agency determined that the solicitation would instead use CBSA 51, West Virginia, for its Medicare benchmark. Id. The agency contemporaneously explained that it chose to shift the benchmark because Maryland uses an idiosyncratic Medicare reimbursement formula different from every other state, and that using a CBSA that relied on a conventional Medicare reimbursement formula would facilitate the agency's ability to analyze the pricing it received. AR, Tab 8, Market Research Memorandum at 3. Additionally, the agency explained that West Virginia hospitals have been historically used to provide services to FCI Cumberland, and Cumberland's location is directly on the West Virginia border with Maryland. MOL at 6‑8. Subsequently, the agency issued the solicitation, which explained that offerors were required to express their pricing as a discount from, or premium to, the Medicare rates for CBSA 51, but that the Medicare benchmark was not intended to restrict any offeror's actual pricing. AR, Tab 17, RFP at 48. Specifically, the solicitation provided that: For each category of service to be provided, Offerors will be allowed to propose a variance from the benchmark Medicare rate in the form of a discount from or a premium to Medicare rates established by the Centers for Medicare and Medicaid Services.