Protest Against Award of Sole-Source Contract

B-195392: Jan 17, 1980

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A firm protested the award of a contract by the District of Columbia General Hospital (DCGH) of a sole-source contract for the collection of delinquent Medicare, Medicaid, and Group Health accounts. Prior to DCGH making award of the sole-source procurement, the protester requested that it be given an opportunity to compete for the contract. DCGH sent the firm the proposed scope of the work for its review and comments. The firm was told that if it wished to perform the work it should furnish information concerning its technical approach, staffing plan, and experience. The firm replied after the deadline set by DCGH. The firm contended that DCGH used restrictive procurement methods that unduly limited other prospective offerors who were fully qualified to perform the required services. DCGH initially contended that GAO should have denied the protest on the ground that the firm had submitted a late technical proposal. DCGH contended that the awardee's basis for billing and collection was unlike that of other commercial collection agencies and that it was thoroughly familiar with the accounts to be collected. GAO held that the DCGH request for technical data was not a formal solicitation but merely a formal survey. Thus, the hospital's contention that the firm submitted a late technical proposal was denied. The decision to procure on a sole-source basis will not be disturbed by GAO when a written Determination and Findings is supported by a record sufficiently establishing that the awardee is the only known source with the capability to satisfy the procuring activity's requirements. In this case, GAO held that DCGH did not demonstrate that no firm other than the awardee could fulfill the hospital's requirements and that prior experience was not in itself a legally adequate sole-source justification. The protest was sustained. Since the work had already begun on the contract, GAO directed DCGH not to renew the contract when it expires and to resolicit on a competitive basis.