Sterling Medical Corporation

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:  Sterling Medical Corporation

File:  B-412407; B-412407.2

Date:  February 3, 2016

DIGEST

Protest challenging the evaluation of proposals is sustained where the evaluation is inadequately documented; the agency credited the awardee for features not related to the evaluation criteria; and, the agency failed to recognize instances where the awardee omitted required information.

Sterling Medical Corporation, the incumbent contractor, located in Cincinnati, Ohio, challenges the award of a contract for a community-based outpatient clinic to Valor Healthcare, located in Addison, Texas, under request for proposals (RFP) No. VA262-15-R-0256, issued by the Department of Veterans Affairs (VA).  The protester challenges the evaluation of proposals and the source selection decision.

We sustain the protest.

BACKGROUND

The VA issued the RFP on an unrestricted basis on July 10, 2015, seeking proposals to provide primary care, telemental health, and medical telehealth services at the Imperial Valley community-based outpatient clinic, located in Imperial County, California.  RFP at 1.  The RFP contemplated the award of a fixed‑price, indefinite-delivery, indefinite-quantity contract for a one-year base period with four 1-year options.  Id. at 8-10.  Award was to be made on a best-value basis considering the following seven evaluation factors, in descending order of importance:  (1) coordination and continuity of care; (2) experience; (3) quality control/quality assurance; (4) suitability and accessibility of facility; (5) past performance; (6) veteran involvement; and (7) price.  Id. at 148-49.  When combined, the non‑price factors were more important than price.  Id. at 148.  The RFP advised offerors that failure to provide requested information might render the offeror’s proposal technically unacceptable.  RFP at 139.

Of relevance to this protest, under the first and most important factor, coordination and continuity of care, the RFP directed offerors to describe their contingency plans for equipment downtime, and to demonstrate that patient care will not be compromised or adversely affected in the event there are periods of time where the use of computers is not available.  Id. at 149.  The RFP also advised offerors that the clinic must provide laboratory services on site as described in the Performance Work Statement (PWS), and directed offerors to provide copies of College of American Pathologists, Clinical Laboratory Improvement Amendments, or Joint Commission accreditation and current applicable state licensing and/or Center for Disease Control accreditation or proof that such documents are being processed.  The RFP required lab services to be performed at the primary care site, and required offerors to provide documentation that demonstrates procedures to ensure the provision of lab testing consistent with the PWS.  Finally, the RFP required offerors to describe a mechanism for providing continuity of care, including the method/plan for assuring communication of clinical issues between the offeror and the VA.  The plan was required to demonstrate that the offeror would provide services with continuity of care as the focal point for primary care providers and to ensure continuity of care throughout the contract period.  Id.

Also of relevance, under the experience factor, the RFP directed offerors to provide a list of names of the physicians, physician assistants, nurse practitioners, nurses, and other primary care provider staff intended to be utilized in the performance of this contract.  Id. at 149.  Offerors were instructed to include curriculum vitae and three current references for each proposed physician, physician’s assistant, nurse practitioner, and registered nurse.  Id. at 150.  Offerors were also directed to provide information demonstrating that registered nurses had two to three years of registered nursing experience, a minimum of one year of primary care experience, and experience with electronic medical record documentation.  Id.  Finally, offerors were instructed to list the number of administrative support staff and describe the level of training and experience that will be utilized to meet the administrative support functions of this contract, including such functions as patient scheduling, medical record documentation, record processing and reporting, grievance system, and quality assurance and performance improvement.  Id.

The agency received three proposals by the closing date, including proposals from Sterling and Valor.  A technical evaluation board (TEB) was convened to evaluate proposals under the first four evaluation factors:  coordination and continuity of care; experience; quality control/quality assurance; and, suitability and accessibility of facility.  Contracting Officer’s (CO’s) Statement at 2.  The TEB members finalized consensus forms on August 26, indicating what the evaluators viewed as strengths and weaknesses under each factor for each offeror.  The source selection authority (SSA) evaluated the proposals under the remaining three factors:  past performance; veteran involvement; and price.  The SSA also conducted a review of the proposals under the coordination and continuity of care; experience; quality control/quality assurance; and suitability and accessibility of facility factors.  The SSA disagreed with the TEB’s evaluation of Valor’s proposal in several areas, and upwardly adjusted Valor’s ratings under three of the first four evaluation factors:  coordination and continuity of care; experience; and quality control/quality assurance factors.[1]  AR, Tab 15, Source Selection Decision at 12-16.  Although the SSA also disagreed with the TEB’s evaluation of Sterling’s proposal in a few areas, he did not adjust the overall ratings assigned to Sterling.[2]  As a result of the SSA’s changes, Valor’s proposal, which had been rated lower than Sterling’s proposal under the experience factor and the quality control/quality assurance factor, and rated equally under the coordination and continuity of care factor, was ultimately assigned a higher rating than Sterling’s proposal under the coordination and continuity of care factor, the most important factor, and equal ratings under the other evaluation factors. [3]

The following table summarizes the final evaluation results for Sterling and Valor:

	Valor Healthcare	Sterling Medical Associates
Coordination and Continuity of Care	Excellent	Good
Experience	Good	Good
Quality Control/Quality Assurance	Excellent	Excellent
Suitability and Accessibility of Facility	Good	Good
Past Performance	Confidence	Confidence
Veteran Involvement	No Consideration	No Consideration
Price[4]	$7,301,836	[DELETED]

AR, Tab 15, Source Selection Decision, at 8.

The SSA selected Valor for award, explaining that it had the highest technical rating and the lowest price.  AR, Tab 15, Source Selection Decision at 21.  The agency notified Sterling that it had not been selected for the award on October 8, and provided Sterling a written debriefing on October 19.  This protest followed on October 26.

DISCUSSION

Sterling challenges numerous aspects of the agency’s evaluation of proposals and contends that the source selection decision was unreasonable.[5]  Sterling argues that Valor’s proposal should have received lower ratings under the coordination and continuity of care; experience; and quality control/quality assurance evaluation factors, and contends that its own proposal should have received higher ratings under the coordination and continuity of care factor and the experience factor.  As discussed below, we sustain the protest with regard to the agency’s evaluation of Valor’s proposal under the coordination and continuity of care and experience factors.  In addition, based on the numerous issues we have identified with the evaluation, we conclude that the source selection decision lacked a reasonable basis. 

Coordination and Continuity of Care

Sterling argues that Valor should have received a lower rating under the coordination and continuity of care factor.  As noted above, the TEB initially assigned a rating of good to Valor’s proposal under this factor, identifying two significant strengths, five strengths, and two weaknesses, but the SSA changed Valor’s rating to excellent, after elevating three of the strengths assigned by the TEB to significant strengths and adjusting a weakness assigned by the TEB to a strength.[6]  AR, Tab 15, Source Selection Decision at 12; RFP at 149.  Sterling argues that several of the findings of significant strength lack a reasonable basis, and asserts that the SSA inadequately documented the decision to elevate the weakness to a strength. [7] 

The evaluation of an offeror’s proposalis amatterwithin the agency’s discretion.  NationalGov’tServs.,Inc., B-401063.2 et al., Jan. 30,2012, 2012 CPD¶59 at 5.  Aprotester’sdisagreementwith the agency’s judgment in its determination of the relative merit ofcompeting proposals, without more, does notestablish thatthe evaluation was unreasonable.  VTGriffinServs.,Inc.,B-299869.2, Nov. 10, 2008,2008CPD¶219at 4.  While we willnot substituteour judgment forthat of the agency, we will question the agency’sconclusions where they are inconsistent with the solicitation criteria and applicable procurement statutesand regulations, undocumented, or not reasonably based.  Public Commc’nsServs.,Inc., B-400058, B-400058.3, July 18,2008, 2009 CPD ¶154 at 17.

First, Sterling argues that the agency inappropriately assigned a significant strength to Valor’s proposal based on its combined years of management experience, which is not relevant to the evaluation criteria for the coordination/continuity of care factor.  Specifically, Sterling challenges the significant strength assigned to Valor’s proposal based on its combined years of managing community-based outpatient clinics (CBOC), arguing that experience managing clinics is unrelated to the information sought under the factor, which focuses on contingency plans for equipment downtime, the provision of laboratory services, and the mechanism for providing continuity of care throughout the life of the contract.  RFP at 149.  We agree. 

Agencies are required to evaluate proposals based solely on the factors identified in the solicitation, and mustadequately document the basesfor theirevaluationconclusions.  InterconAssocs.,Inc.,B-298282, B‑298282.2,Aug. 10, 2006,2006 CPD ¶121 at5.  While agencies properly may applyevaluation considerations thatare not expressly outlined in the RFP if thoseconsiderations are reasonably and logically encompassed within the statedevaluation criteria, there mustbe a clear nexus betweenthe stated and unstated criteria.  RaytheonCo., B-404998,July 25, 2011, 2011 CPD¶ 232 at 15-16.  Here, there is no clear nexus between Valor’s experience managing CBOCs and its plans for equipment problems, procedures for providing laboratory services, or mechanism for providing continuity of care.

Additionally, the TEB and the SSA failed to sufficiently document their rationales in a way that would allow us to discern why Valor’s experience managing CBOCs was relevant under this factor.[8]  The TEB documented its assessment of a significant strength with a single bullet point that reads:  “55 years of combined management years in CBOCs.”  AR, Tab 17, Consensus for Valor at 4.  As such, the record contains no information explaining why the TEB believed the information was relevant under this technical factor.  The SSA incorporated the TEB’s findings in the source selection decision document, but provided no additional explanation.  AR, Tab 15, Source Selection Decision at 13. 

An agency’s evaluation of proposals and source selection decision should be documented in sufficient detail to allow for the review of the merits of a protest.  Clark/Foulger-Pratt JV, B-406627, B-406627.2, July 23, 2012, 2012 CPD ¶ 213 at 10.  An agency that fails to adequately document its evaluation of proposals or source selection decision bears the risk that its determinations will be considered unsupported, and absent such support, our Office may be unable to determine whether the agency had a reasonable basis for its determinations.  Id.  Given the lack of a clear nexus, and the absence of any explanation by the agency, we have no basis upon which to conclude that the agency’s assignment of a significant strength to Valor’s proposal based on its years of combined management experience was reasonable.

Sterling also argues that the SSA lacked a reasonable basis for elevating the TEB’s findings of strengths to significant strengths for Valor’s transition plan and its computer downtime contingency plan, under the coordination and continuity of care factor.  In particular, Sterling disputes the reasonableness of the following explanations provided by the SSA:

·  Pg 7--[DELETED].

·  Pg 6 –[DELETED].

AR, Tab 15, Source Selection Decision at 13.

Regarding the transition plan, Sterling argues that the agency’s determination lacked a reasonable basis because Valor did not actually make a commitment that it would not reschedule any patients.  Instead, Sterling maintains that Valor merely expressed the “intention” not to reschedule.  Both parties’ positions are based on the following excerpt from Valor’s proposal:

[DELETED].

 AR, Tab 13, Valor’s Proposal, at 9.

The agency argues that it was reasonable to interpret Valor’s stated intention not to reschedule any existing patient appointments as equivalent to a goal or a commitment.  Supp. AR, at 8.  We disagree.  While the excerpt above shows that Valor intends to avoid rescheduling patients, Valor’s success is dependent on a number of factors including, as the protester points out, the fact that Valor will need to depend on the VA to facilitate the transfer of existing information in a timely manner.  Supp. Comments at 6.  In other words, there are no guarantees, based on the awardee’s proposed approach, that there will be no rescheduling and no delays.  As such, we find that the SSA’s decision to elevate the strength assigned to Valor’s proposal, based on its seamless transition plan, to a significant strength lacked a reasonable basis.

With regard to the significant strength assigned to Valor’s proposal because of its [DELETED] backup plan for computer downtime, Sterling argues that, contrary to the assertion made by the SSA in the source selection decision, the awardee’s plan does not exceed the requirements of the solicitation.  Supp. Comments at 7.  The protester also argues that, to the extent the SSA identified Valor’s “robust” backup plan as a significant strength, he should also have identified Sterling’s “robust” contingency plan for equipment downtime as a significant strength.  Supp. Comments at 7.  Given that the agency provides no compelling rationale as to how Valor’s plan exceeds the requirements of the solicitation or otherwise deserves a significant strength, we find that Sterling’s argument has merit. 

While Sterling’s backup plan for computer downtime, which involves [DELETED], differs from the awardee’s plan to [DELETED], Sterling argues that both approaches simply meet the requirement for a contingency plan addressing computer downtime.  Sterling argues in this regard that “[a] plan to have a [DELETED] as temporary medical records is commonplace in many medical clinics.  While it may increase an offeror’s performance in the event of computer downtime, the degree to which it will increase the quality of an offeror’s performance is not so noteworthy that it should warrant a significant strength finding.”  Comments and Supp. Protest, at 11. 

The agency contends that Sterling’s argument amounts to nothing more than disagreement with the agency’s assessment.  The agency’s assessment, however, lacks sufficient detail as to why Valor’s proposed approach exceeds the solicitation’s requirements and merits a significant strength.  The best explanation put forth by the agency is that “Valor’s proposal included an additional step in anticipation of possible computer downtime.”  Supp. AR at 10.  This explanation does not provide any details about the value of the additional step, or why the approach, which actually involves extra work, is really worthwhile.  Additionally, according to the agency, the [DELETED] system was not required by the solicitation, but “is actually the appropriate approach to use.”  Supp. AR at 10.  Given that the solicitation did not require a [DELETED] backup system, and given the lack of detail in the record about why a [DELETED] system was valued by the agency, we are unable to conclude that it was reasonable for the agency to award a significant strength to Valor for its [DELETED] backup plan, while awarding only a strength to Sterling for its [DELETED] backup plan. 

Sterling further argues that the SSA failed to adequately document his decision to redesignate a weakness in Valor’s proposal identified by the TEB as a strength.  Although source selection officials may reasonably disagree with the ratings and recommendations of evaluators, their independentjudgments must be reasonable, consistent with the stated evaluation scheme, and adequately documented.  EarlIndus., LLC, B-309996, B-309996.4, Nov. 5,2007, 2007CPD¶203 at 7.

The TEB assigned a weakness to Valor’s proposal based on Valor’s failure to propose a continuity strategy across the “VA/Clinic/Community.”  AR, Tab 17, Consensus for Valor at 4.  The SSA removed the weakness, noting that the RFP required a description of a plan/method for assuring communication of clinical issues between the offeror and the VA, but did not require a continuity strategy that included the community.  AR, Tab 15, Source Selection Decision at 13.  The SSA’s decision to remove the weakness appears to be reasonably related to the requirements of the RFP.

After explaining the rationale for removing the weakness, however, the SSA explained that he was assigning a strength to Valor’s proposal based on its plan.  Specifically, the SSA explained:  “Offeror outlined the plan for providing continuity of care between the offeror and the VA.  The plan is determined to be a strength.”  Despite this conclusion, the SSA provides no explanation as to why Valor’s plan merited a strength.  As such, we are unable to conclude that the SSA had a reasonable basis for elevating the weakness assigned to Valor’s proposal to a strength.  As discussed above, when an agency fails to adequately document its evaluation of proposals or source selection decision, it bears the risk that its determinations will be considered unsupported, and absent such support, our Office may be unable to determine whether the agency had a reasonable basis for its determinations.  Clark/Foulger-Pratt JV, supra. 

Our findings above call into question the reasonableness of the agency’s rating of Valor’s proposal under the coordination/continuity of care factor, the most heavily-weighted evaluation factor.  In addition to failing to adequately document the findings that support the overall rating, the SSA offered little explanation for why he considered Valor’s proposal to merit a rating of excellent under this factor, instead of good. 

The SSA’s explanation for elevating Valor’s rating under this factor from good to excellent did not include a finding that Valor’s approach exceeded all of the VA’s requirements or that it indicated a thorough understanding of the requirements; rather, the SSA simply explained that Valor was rated as excellent because “they have five significant strengths, two strengths, and one weakness and meet the definition for [excellent] because in this factor they exceeded the VA requirement….”  AR, Tab 15, Source Selection Decision at 12.  As discussed above, although source selection officials may reasonably disagree with the ratings and recommendations of evaluators, their independentjudgments must be reasonable, consistent with the stated evaluation scheme, and adequately documented.  EarlIndus., LLC, supra.  

Experience

Sterling also argues that Valor should have received a lower rating under the experience factor.  In this regard, the TEB assigned Valor’s proposal a rating of satisfactory under the factor, identifying no significant strengths, three strengths, and five weaknesses.  The SSA raised the rating to good after identifying a significant strength under the factor and removing three weaknesses.[9]  Sterling argues that the significant strength added by the SSA was based on information not relevant to the evaluation criteria for the factor.  The protester also contends that Valor omitted required information from its proposal pertaining to administrative support, and failed to propose adequate staffing.[10]  Supp. Comments at 17-19.

With respect to Sterling’s contention that the SSA deviated from the evaluation scheme, Sterling argues that it was inconsistent with the terms of the RFP for the SSA to assign Valor’s proposal the following significant strength under the experience factor:

Valor currently operates 28 CBOCs across the nation ranging in size from a few hundred enrollees to over 8,000.  They are the only national CBOC operator to have a blanket accreditation from the Joint Commission for their CBOCs.  This accreditation applies to all of their existing clinics as well as any new clinics they are awarded.

AR, Tab 15, Source Selection Decision at 13-14.  According to Sterling, this information is not responsive to the evaluation criteria for this factor.  As previously discussed, agencies are required to evaluate proposals based solely on the factors identified in the solicitation, and mustadequately document the basesfor theirevaluationconclusions.  InterconAssocs.,Inc.,B-298282, B‑298282.2,Aug. 10, 2006,2006 CPD ¶121 at5.  While agencies properly may apply evaluation considerations thatare not expressly outlined in the RFP if those considerations are reasonably and logically encompassed within the stated evaluation criteria, there mustbe a clear nexus betweenthe stated and unstated criteria.  RaytheonCo., B‑404998,July 25, 2011, 2011 CPD¶ 232 at 15-16.

The experience factor, as set forth in the RFP, directed offerors to submit information, including curriculum vitae and references, for the physicians, physician assistants, nurse practitioners, nurses, and other primary care provider staff that will be used in the performance of the contract.  RFP at 149-50.  Offerors were also instructed to list the number of administrative support staff and describe the level of training and experience that will be utilized to meet the administrative support functions of this contract, including such functions as patient scheduling, medical record documentation, record processing and reporting, grievance system, and quality assurance and performance improvement.  Id.

In the one-page narrative Valor provided in response to this factor, Valor highlights the fact that it operates 28 CBOCs across the nation.  While we acknowledge that this information speaks generally to the company’s experience, Valor’s experience operating CBOCs does not provide information about the experience of the specific individuals being proposed to do this work, which is the focus of the evaluation criteria for this factor.  Again, the SSA’s finding, set out in its entirety above, provides no explanation.  As such, the nexus between the experience of the company and the evaluation criteria is unclear. 

The VA argues, in response to the protest, that the Joint Commission accreditation is “directly related to [Valor’s] administrative support functions, proven abilities, and the level of training and experience that will be extended to meet the necessary administrative support functions of this contract.”  Supp. AR at 7.  Nonetheless, the TEB did not assign a strength or significant strength to Valor under this factor based on its accreditation, and the SSA provided no explanation as to why he believed Valor merited a significant strength on this basis.  Given the lack of a clear nexus to the evaluation factor, and the failure of the SSA to adequately document the rationale for the assignment of a significant strength in this regard, we have no basis upon which to conclude that the SSA’s evaluation was reasonable.[11]

In a related argument, Sterling contends that Valor failed to describe the level of training and experience that will be utilized to meet the administrative support functions of the contract, including such functions as patient scheduling, medical record documentation, record processing and reporting, grievance system, and quality assurance and performance improvement altogether.  RFP at 149-50.  In response to this argument, the VA argued that the fact that Valor is accredited by the Joint Commission speaksto Valor’s administrative support functions, proven abilities, and the level of training and experience that will be extended to meet the necessary administrative support functions of this contract.  Supp. AR at 7.  As discussed above, however, the record is devoid of any explanation as to how the accreditation speaks to the training or experience of the Valor personnel that will be used to carry out the administrative support functions required by the contract. 

While the curricula vitae Valor provided in its proposal for some administrative staff provides certain information about the experience and qualifications of those individuals, and while Valor described its medical scribe program, which would presumably be related to medical record documentation, Valor’s proposal does not describe the level of training and experience that Valor will use to meet the administrative requirements here.  For example, Valor’s proposal does not specifically address patient scheduling or a grievance system.  Based on the lack of information in the record, we conclude that the agency did not reasonably evaluate whether the staff proposed by Valor would be sufficiently experienced and trained to carry out the administrative tasks called for under the contract.  As such, we cannot find the evaluation or source selection decision reasonable and consistent with the requirements of the solicitation. 

Lastly, Sterling alleges that Valor did not propose the level of staffing required by the RFP, and that, as a result, it was unreasonable for the agency to assign a strength to the proposal in this area.  Our review of the record, including the arguments raised by the parties, and the contemporaneous documents, leads our Office to conclude that Valor’s proposal may have fallen short of the staffing requirements identified in the RFP and its amendments.  In addressing this issue in a supplemental agency report, the VA has raised arguments that appear inconsistent with the arguments initially made by the CO here.  Compare Supp. AR at 16 with CO’s Statement at 9 (relying on different baseline numbers for staffing requirements).  While we need not reach a conclusion on this issue in this decision, the VA may want to reexamine its solicitation, the proposals, and the resulting evaluations to determine whether the agency has requested, and will receive, sufficient staffing to meet its needs.

CONCLUSION AND RECOMMENDATION

As discussed above, we have identified a number of issues with the VA’s conduct of this procurement and find that, generally, the evaluation of proposals was unreasonable and not adequately documented.  We conclude that the unreasonable evaluation resulted in prejudice to the protester, notwithstanding Valor’s price advantage, since a reasonable evaluation could result in a substantially different competitive position between the offerors, especially given that the non‑price evaluation factors were significantly more important than the price/cost factor. 

We recommend that the agency reevaluate proposals consistent with this decision, and make a new source selection decision.  In the event a different offeror is assessed as submitting the proposal that offers the best value, we also recommend that the best-value offeror receive the award, and that the current award be terminated.  Additionally, we recommend that Sterling be reimbursed the reasonable costs of filing and pursuing the protest, including reasonable attorneys' fees. 4 C.F.R. § 21.8(d)(1).  Sterling should submit its claim for costs, detailing and certifying the time expended and costs incurred, with the contracting agency within 60 days after receipt of this decision.  4 C.F.R. § 21.8(f)(1).

The protest is sustained.

Susan A. Poling
General Counsel

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