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The agency initially awarded the contract to the protester. Following a protest and corrective action, the agency awarded the contract to another offeror. The protester argued that by filing the protest, the other offeror had initiated discussions with the agency, which allowed the other offeror to explain its proposal. Because the agency had not given other offerors the same opportunity, the proteser contended the agency had conducted unequal discussions. GAO rejected the argument. Only the agency, not an offeror can initiate discussions. Moreover, the mere filing of a protest does not amount to discussions with an agency.

Quality Technology, Inc., GAO B-420576.3

Background

The Centers for Medicare and Medicaid Services (CMS) issued an RFP seeking information technology services. After an initial evaluation of proposals, CMS awarded the contract to the incumbent, Quality Technology, Inc. Two unsuccessful offerors, including Sparksoft Corporation, protested the award. In response to the protest, CMS took corrective action to reevaluate proposals. Following the reevaluation, CMS awarded the contract to Sparksoft. Quality protested.

Analysis

Price Evaluation

Quality alleged the price evaluation was flawed because CMS had failed to adjust for the time it would take Sparksoft, the non-incumbent, to transition into full performance. Quality contended that as the incumbent who would not need the transition period, its price could not have been comparable to Sparksoft’s.

GAO found that Quality’s argument was an untimely objection to the terms of the solicitation. The RFP required non-incumbent and incumbent offerors to submit different pricing for the base year to account for the transition period. To the extent that Quality considered this requirement to be improper because it created an unequal evaluation scenario, it should have filed a protest before the proposal deadline.

Risk of Sparksoft’s Price

Quality contended CMS had failed to properly account for the risk associated with Sparksoft’s transition. Quality reasoned that Sparksoft would be transitioning into the contract during a surge period, and that the agency should have considered this risk of the transition during the surge when assessing whether Sparksoft’s price was realistic.

GAO reasoned that the factual foundation of Quality’s argument was flawed. The RFP provided for a three month transition period. CMS had awarded the contract in May. The surgue period did not begin until September. Thus, Sparksoft’s three-month transition would occur before the surge period.

Moreover, GAO noted that Quality’s argument was essentially a complaint about the analysis of price realism. But the RFP contemplated a fixed-price contract. Unless the solicitation states otherwise, an agency may not evaluate price realism for a fixed-price contract. Here, the RFP did not provide for a price realism analysis. Accordingly, CMS did not err in failing to consider realism

Unequal Discussions

Quality alleged the agency engaged in unequal discussions. Quality contended that Sparksoft used its protest after the initial award to promote and explain its offer. This protest, Quality reasoned, amounted to discussions. Because Quality was not afforded the same opportunity to discuss its proposal, the agency had conducted unequal discussions.

GAO rejected the premise of the argument. Discussions occur when an agency initiates communications with an offeror. An offeror cannot initiate discussions with an agency. What’s more, nothing in the FAR indicates that the mere filing of protest amounts to discussions with an agency.

Quality is represented by Donald J. Walsh of RKW Law Group. The intervenor, Sparksoft, is represented by David B. Dixon, Robert C. Starling, and Toghrul M. Shukurlu of Pillsbury Winthrop Shaw Pittman LLP. The agency is represented by William Shim and Ethan Chae of the Department of Health and Human Services. GAO attorneys Heather Self and Peter H. Tran participated in the preparation of the decision.