Matter of: Coastal Government Services, Inc. File: B-251393 Date: March 10, 1993

Matter of: Coastal Government Services, Inc. File: B-251393 Date: March 10, 1993

PROCUREMENT Competitive Negotiation Discussion Adequacy Criteria Requirement for meaningful discussions is satisfied when all offerors in the competitive range are advised of the weaknesses, deficiencies, and excesses in their proposals and are given the opportunity to revise their proposals through the submission of best and final offers. Agencies are not obligated to afford offerors all-encompassing discussions or to discuss every element of a proposal that did not receive the maximum possible score. PROCUREMENT Competitive Negotiation Contract awards Administrative discretion Cost/technical tradeoffs Technical superiority Contracting agency properly decided to award an indefinite-quantity contract to the offeror with the higher rated, higher priced proposal where the solicitation stated that technical factors would be considered significantly more important than price and the awardee's proposal was rated significantly higher than the protester's in nearly every technical evaluation factor.

Attorneys

DECISION Coastal Government Services, Inc. protests the award of a contract to PHP Healthcare Corporation under request for proposals (RFP) No. DADA10-92-R-0007, issued by the Department of the Army for the establishment and operation of a medical clinic furnishing primary medical care services for eligible military dependents and retired military personnel at Fort Benning, Georgia. Coastal, which offered a lower price than PHP, principally contends that the agency failed to conduct meaningful discussions with the firm because "the Army must have found something . . . technically unacceptable which it failed to bring to [its] attention during discussions." Coastal also questions the agency's decision to award to a technically superior offeror, PHP, at a higher price.

We deny the protest.

The RFP, issued April 1, 1992, contemplated the award of an indefinite- quantity contract to the responsible offeror whose proposal was most advantageous to the government, considering price and other factors. The RFP contained the following factors (each factor contained several subfactors): (1) management and financial capability; (2) approach to satisfying requirements; (3) quality control/assurance; (4) marketing plan; and (5) price. The RFP stated that technical factors were significantly more important than price, and that each offeror's price would be evaluated for realism and adequacy.

Six proposals were received by May 15, 1992, the closing date for receipt of initial proposals. The initial technical evaluation results of the four highest rated offerors were as follows:[1]

Total Adjectival Offeror Technical Score Rating

PHP 863 Excellent

Offeror A 785 Satisfactory

Offeror B 758 Satisfactory

Coastal 686 Susceptible to being satisfactory

On June 26, 1992, the agency sent each offeror written discussion questions regarding their proposals. The letter of discussion to the protester requested additional information and clarification concerning: (1) retention incentives and proposed training programs for employees and subcontractors; (2) flexibility of resources; (3) financial capabilities; (4) understanding of the scope of work; (5) understanding of the qualification requirements of specific personnel; (6) task identification; (7) proposed radiology services; (8) proposed hours of clinic operation; (9) marketing plan; and (10) cost breakdown. Responses to the discussion letters and revisions to proposals were received, and a second technical evaluation was conducted beginning on July 20.

The agency again initiated discussions with Coastal as a result of its second technical evaluation findings. Specifically, the agency asked Coastal to provide information on the number of employees or subcontractors in each category of services, clarify the ratio of medical assistants to physicians, and clarify its understanding of the required operating hours. Coastal timely filed responses. Subsequently, on September 11, the agency requested best and final offers (BAFO) by September 18 which were received at that time. Due to a new wage rate determination by the Department of Labor, the agency requested a second round of BAFOs on October 5. Upon receipt of the second BAFOs, the agency conducted a final evaluation with the following results:

Technical Adjectival Offeror Score Rating Price

PHP 872 Excellent $14,708,368

Offeror A 825 Excellent 16,545,553

Offeror B 804 Excellent 12,803,366

Coastal 770 Satisfactory 12,139,518

The agency then conducted a price/technical trade-off among these four offerors and selected PHP for award on November 20, 1992. This protest followed, principally alleging inadequate discussions. Coastal was subsequently given an oral and written debriefing on December 1 and December 2, respectively.

The requirement for meaningful discussions is satisfied when all offerors in the competitive range are advised of the weaknesses, deficiencies, and excesses in their proposals, and are given the opportunity to revise their proposals through the submission of BAFOs. Instrument Control Serv., Inc., B-247286, Apr. 30, 1992, 92-1 CPD Para. 407. Agencies are not obligated to afford offerors all-encompassing discussions or to discuss every element of a technically acceptable, competitive range proposal that has received less than the maximum possible score. General Servs. Eng'g, Inc., B-245458, Jan. 9, 1992, 92-1 CPD Para. 44.

As stated above, Coastal, in its initial protest, essentially alleged that the agency "must have found something" wrong with its proposal because it did not receive the award despite having submitted a lower priced proposal. Coastal failed to identify any material weaknesses, deficiencies, or excesses that the agency failed to discuss with the firm. During the course of the protest, a protective order was issued, and Coastal was furnished with copies of PHP's proposal, all evaluation documents, including the raw evaluation worksheets by the individual evaluators, all relevant discussion questions, and an extensive narrative and business clearance memorandum explaining in detail the agency's procedures and actions in identifying discussion questions and in selecting PHP for award. In its comments on the agency report, Coastal again fails to identify any material deficiencies, weaknesses, or excesses that the agency failed to point out to the firm. Rather, Coastal apparently complains that the discussions should have been more all- encompassing to bring its scores to the technically highest level, comparable with PHP's scores.

The record shows that the agency conducted meaningful discussions with Coastal. Specifically, after the first evaluation, Coastal was rated as less than satisfactory in the areas of management, recruitment, retention, training, staffing plan, flexibility of resources, financial capabilities and four other areas. All of these areas were the subject of at least one round of discussions and clarifications. As a result of the first and second rounds of discussions, Coastal was rated at least satisfactory in all of these areas, and, in fact, was rated as outstanding in some categories and excellent in others. Therefore, in our view, Coastal's bare allegation that discussions were inadequate is not supported by the record. Simply put, the agency was not required to discuss each and every aspect of Coastal's proposal that received less than an "outstanding" score so as to enable Coastal to increase its rating to excellent or outstanding. Accordingly, we deny this protest ground.

Finally, Coastal challenges the award to PHP at a price $2.5 million higher than Coastal's price since Coastal's proposal met all minimum requirements. Coastal does not challenge the agency's finding that PHP submitted a significantly superior technical proposal.

In negotiated procurements, unless the RFP so specifies, there is no requirement that award be based on lowest cost. Comarco, Inc., B-225504 et al., Mar. 18, 1987, 87-1 CPD Para. 305. A procuring agency has the discretion to select a more highly rated technical proposal if doing so is reasonable and is consistent with the evaluation methodology set forth in the RFP. Id. An award to a higher rated offeror with higher proposed costs can be justified where the technical superiority of the selected offeror's proposal outweighs the price premium. See BDM Management Servs. Co., B-228287, Feb. 1, 1988, 88-1 CPD Para. 93.

Here, the RFP specifically stated that technical factors would be considered significantly more important than price. In fact, price was the least significant factor. The record shows, and Coastal does not dispute, that PHP's BAFO was rated as significantly technically superior to Coastal's BAFO. PHP's BAFO received a higher score than Coastal's under nearly every technical evaluation factor. The record establishes the technical superiority of PHP's proposal, for example, in the areas of experience, staffing, approach to satisfying the requirements, flexibility of changes, clinic usage patterns, laboratory services, and pharmacy services. In light of this superiority, the agency, in our view, reasonably determined that the technical superiority offered by PHP for these medical services outweighed the price difference.

The protest is denied.

1. In its evaluation, the agency gave the following numerical weight to each technical factor: factor 1--300 points; factor 2--275 points; factor 3--300 points; and factor 4--100 points, for a maximum total technical score of 975 points.