Agency Raised Concern in Initial Round of Discussions, But It Wasn’t Resolved. Did the Agency Have to Keep Raising the Issues in Subsequent Discussions?

The agency didn’t raise previously identified concerns in subsequent rounds of discussions. The protester claimed it was thus misled into thinking the concerns had been resolved. GAO rejected the argument. An agency is not required to continuously raise unresolved issues in multiple rounds of discussions.

Health Net Federal Services, LLC, GAO B-421405.2, B-421405.3

• Awardee’s Technical Approach –The solicitation sought support services for DoD’s TRICARE healthcare network. The protester argued the agency didn’t consider risks posed by the awardee’s lack of experience with an existing TRICARE network. GAO found this argument amounted to disagreement. The awardee proposed a robust plan that didn’t depend on an existing network.
• Misleading Discussions – The agency raised concerns with the protester’s technical approach in an initial round of discussions. But the agency did not raise the issues in subsequent rounds of discussions. The protester said the agency’s silence misled the protester into believing these issues had been resolved. GAO didn’t think this amounted to misleading discussions. Generally, an agency is not required to raise unresolved issue in subsequent rounds of discussions. In fact, an agency is only required to re-raise concern if it has previously indicated the concern was resolved. Here, the agency never indicated the concerns had been resolved.
• Close at Hand – The protester claimed the agency ignored “close at hand” past performance information—namely, a GAO report that found management problems on the incumbent contract. The protester believed if the agency had considered this GAO report, it would have mitigated some of protester’s performance issues on the incumbent contract. But GAO said the report was not close at hand. The report had been prepared by GAO, not the soliciting agency. It was not clear evaluators were even aware of the report. Moreover, the report was an evaluation of the agency’s management, not the protester’s performance and thus was not a meaningful source of past performance information.
• Disparate Treatment – The protester contended the agency disparately evaluated past performance. The protester alleged the awardee and the protester both had performance problems. The agency, however, credited the awardee for improving its performance, but didn’t similarly credit the protester. GAO rejected the argument. The difference in the evaluation was reasonably based on underlying difference in the past performance references.
• Small Business Participation – The awardee was owned by a consortium of non-profits. The protester argued the awardee had improperly excluded these owners from the small business participation calculation. The protester reasoned these owners were affiliates under SBA’s rules and should have been included. GAO, however, found the SBA’s affiliate rules didn’t apply. The awardee itself did not purport to be a small business. The agency reasonably eschewed the SBA’s definition of affiliates and simply followed the FAR’s
• Misrepresentation – The protester contended the awardee made material misrepresentations about is small business contracting plan. GAO didn’t agree. The awardee had excluded subcontractors from its plan. But the awardee was open about the exclusions. The awardee had not made a misrepresentation about is subcontracting plan; it had merely proposed a non-confirming plan.

The protester is represented by Amy L. O’Sullivan, Robert J. Sneckenberg, Cherie J. Owen, James G. Peyster, William B. O’Reilly, Zachary H. Schroeder, Issac D. Schabes, and David H. Favre III of Crowell & Moring LLP. The awardee is represented  by Robert S. Ryland, H. Boyd Greene, and Ashley Pincock of Kirkland & Ellis; Marcia G. Madsen, Luke Levasseur, Cameron R. Edlefsen and Evan C. William of Mayer Brown LLP; and by Robert J. Rothwell, Robert D. Vander Lugt, Amanda J. Dietrick, and Jenny J. Yang of Little, Rothwell, and Vander Lugt PLLC. The agency is represented by Michael R. Bibbo, Morgan Hilgendorf, Dennis A. Dyke, Jason Smith, Justin Dalton, Bradley Richardson, Erik Troff, and Song Kim of the Department of Defense. GAO attorneys Michael Willems and Evan D. Wesser participated in the decision.

–Case summary by Craig LaChance, Senior Editor