REDACTED_Maxmed_GAO_Protest.pdf

901 Kentucky Street, Suite 301, Lawrence, KS 66044 785-200-8919 www.koprince.com www.smallgovcon.com

August 22, 2023

By EPDS

General Counsel U.S. Government Accountability Office 441 G Street, NW Washington, D.C. 20548 Attn: Procurement Law Control Group

Re: Protest of Maxmed Healthcare, Inc.

Solicitation No. HT001523R0003 *Award Suspension Required*

Dear Madam or Sir:

Maxmed Healthcare, Inc. (“Maxmed”),1 challenges the terms of Solicitation No.

HT001523R0003 (the “Solicitation”), the Medical Q-Coded Support and Services – Next Generation (“MQS2-NG”) program issued by the Defense Health Agency (“DHA”) seeking the provision of a variety of medical services such as physician, nursing, dental, medical support, and ancillary services across several different U.S. Department of Defense sites throughout the United States.

I. Summary of protest.

There are a number of flaws with the Solicitation. There are problems with the competition and evaluation method. First, the Solicitation does not comply with the definition of qualifying offeror in the statue and regulation because it is based on awarding to the highest rated offerors, when the regulation mandates that only a pass/fail competition can utilize the exception to competition based on pricing. Second, the Solicitation also utilizes a non-competitive system that does not in any way involve a best value determination.

There are also issues with evaluation of joint venture and subcontractor team members.

The Solicitation improperly allows for a mentor-protégé joint venture to submit a proposal in which the protégé provides no past performance and still receive award and it allows no close review and evaluation of prime versus subcontractor experience. These terms prejudice Maxmed, and this protest should be sustained.

1 All correspondence relating to this protest should be directed to the undersigned counsel. But as required by 4 C.F.R. § 21.1(c)(1), Maxmed’s contact information is as follows:

Maxmed Healthcare, Inc.

General Counsel Solicitation No. HT001523R0003 August 22, 2023 Protest of Maxmed Healthcare, Inc.

II. Preliminary matters.

Maxmed is an interested party.

Maxmed is an interested party for the purposes of filing and pursuing this protest because it is a prospective offeror whose direct economic interest would be adversely affected by the failure to award a contract to it. See 4 C.F.R. § 21.0(a)(1).

Timeliness.

This protest is based upon improprieties in the Solicitation which are apparent prior to the time set for receipt of initial proposals, in this case September 1, 2023, at 12:00 p.m. CDT, and is therefore timely as it was filed prior to that date and time. See 4 C.F.R. § 21.2(a)(1). A complete copy of the protest is being furnished via email within 1 day of this protest filing to the contracting officer via email at dha.jbsa.cod-sa.mbx.ems-cd-mqs2ng@health.mil.

Request for a Protective Order.

Although this is a pre-award protest, Maxmed believes that its resolution may involve discussions of its capabilities and intended response to the Solicitation, and internal agency decision making and documents. To protect this sensitive information, Maxmed therefore asks that a protective order be issued. See 4 C.F.R. § 21.4.

III. Background.

This section summarizes the relevant background information regarding the Solicitation.

The Solicitation

The Solicitation was initially issued on November 6, 2022, but has undergone a series of amendments, with the last being issued on July 3, 2023. See Solicitation (as amended up to July 3, 2023). The Performance Work Statement (“PWS”) states that the objective of the Solicitation is to “acquire professional medical (i.e., clinical) and medical support services to either supplement existing medical staffs or provide full operational services on-site or off-site in support of mission requirements within federal hospitals, clinics, and dental facilities.” PWS at 1. The Solicitation is a 100% small business set-aside multiple-award, indefinite delivery/indefinite quantity (“IDIQ”) contract vehicle under which firm-fixed-price task orders will be issued to awardees. DHA states that it intends to issue up to ten awards. Solicitation at 92. However, it also apparently suggests that up to 10 awards will be given for each geographical Area of Responsibility (“AOR”), of which there are five, which would result in up to 50 total awards. See id. at 84 (“The Government contemplates award of up to ten (10) Indefinite Delivery Indefinite Quantity contracts resulting from this solicitation for each AOR.”), 92; Attachment 2 Self-Scoring Sheet.

Proposals for the Solicitation are to be evaluated in a particular three-step process.

Solicitation at 93. Step 1 is a review of the proposals to determine their adherence to the instructions outlined in the addendum to FAR 52.212-1 in the Solicitation. Id. If a proposal is found to comply with these requirements, it will proceed to Step 2, a review of the self-scoring sheet provided by the offeror. Id. The self-scoring sheet for its part allows offerors to describe the scope, magnitude, and complexity of their experience in various contracts related to medical services. Id. at 93-94. Step 3, then, consists of DHA evaluating offeror-submitted past performance references for relevancy and quality of offeror performance. Id. at 94-95.

When it comes to the basis on which awards will be made in light of the evaluation, the Solicitation states:

Pursuant to Federal Acquisition Regulation (FAR) Subpart 12.301(c), FAR Provision 52.212-2, Evaluation – Commercial Items, Paragraph (a) is replaced in its entirety by addendum as follows:

The Government intends to make an award to each and all qualifying Offerors. In accordance with FAR 2.101, a qualifying Offeror means an Offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation, and the Contracting Officer has no reason to believe would be likely to offer other than fair and reasonable pricing. For the purposes of this solicitation, a technically acceptable proposal is an evaluated proposal with:

(1) one of the ten (10) highest self-scored, Government-validated, Self-Scoring Technical Capability Worksheets for the AOR in which the Offeror has proposed, AND

(2) a satisfactory performance confidence rating.

Id. at 92.

With regards to past performance, the Solicitation states that “[t]he past performance evaluation will consider each Offeror’s demonstrated recent and relevant record of performance in providing services similar to the scope and complexity of this requirement as described in the PWS.” Id. at 94. Offerors may submit up to five past performance references. Id. The Solicitation goes on to state:

The evaluation will consider past performance information regarding predecessor companies and major subcontractors that will perform major or critical aspects of the requirement when such information is recent and relevant to this acquisition.

Past performance information from the prime Offeror’s major subcontractors, teaming or joint venture partners will be treated the same as any prime Offeror’s past performance information.

Id. at 95.

The Solicitation further states that “[t]he Government intends to award without discussions.” Id.

As noted above, proposals for the Solicitation are due September 1, 2023, at 12:00 p.m. CDT.

This protest follows.

IV. Discussion.

The Solicitation bases its award determination structure on exceptions to the requirement of price evaluation established by FAR 15.304(c)(1)(ii) and 10 U.S.C.§ 3206(c)(iii). Both of these provisions mandate a non-competitive award determination system. But the language in the Solicitation is such that it caps the number of awards and redefines “qualifying offeror” in such a manner as to make the system competitive, with awards only going to those with a top ten score for their self-scored technical capability worksheet. This goes against the language and intent of FAR 15.304(c)(1)(ii) and 10 U.S.C. § 3206(c)(iii); awards issued under these provisions must go to all responsible offerors who have submitted a proposal that meets the technical requirements of the given solicitation. Allowing the Solicitation’s structure under the regulation would mean this limited exception swallows the rule.

Furthermore, the Solicitation expressly states that the past performance of subcontractors and joint venture partners will be treated as equivalent to that of the prime offeror. This necessarily means that the Solicitation allows mentor-protégé joint ventures to submit proposals with no past performance on the part of the protégé with no negative repercussions for the joint venture. It is an established rule that the protégé cannot simply ride on the coattails of its partners. Indeed, it gives rise to an absurd situation where a proposal where the only past performance references are from subcontractors is treated the same as a proposal where all past performance references are from the prime offeror. Such a fundamentally absurd result in unreasonable.

A. The Solicitation’s award determination structure violates FAR 15.304(c) and 10 U.S.C. § 3206(c) by capping awards through redefining the statutorily defined phrase “qualifying offeror.”

The Solicitation does not comply with the definition of qualifying offeror in the statue and regulation because it is based on awarding to the highest rated offerors, when the regulation mandates that only a pass/fail competition can utilize the exception to competition based on pricing. GAO “reviews alleged violations of procurement laws and regulations to ensure that the statutory requirements for full and open competition are met.” Shaba Contracting, B-417934 (Dec.

3, 2019) (citing 31 U.S.C. § 3552(a); Cybermedia Techs., Inc., B–405511.3 (Sept. 22, 2011)).

While “[t]he selection of a contract type is the responsibility of the contracting agency[,]” GAO will review agency decisions to determine if they are “consistent with applicable statutes and regulations.” Sagecare, Inc., B-418325 (Mar. 5, 2020) (citing URS Fed. Support Servs., Inc., B– 407573 (Jan. 14, 2013)).

The Solicitation’s award determination structure is apparently based on the structure provided in 10 U.S.C. § 3206(c). The Solicitation cites to FAR 12.301(c) to create an addendum for FAR 52.212-2. See Solicitation at 92. This provision provides in relevant part that, as an alternative to FAR 52.212-2, an agency may “[i]nclude a similar provision containing all evaluation factors required by…subpart 15.3, as an addendum.” FAR 12.301(c)(2). With regards to FAR subpart 15.3, FAR 12.301 is referring specifically to FAR 15.304, “Evaluation factors and significant subfactors.” There it states, again in relevant part:

(ii) In accordance with 10 U.S.C. § 3206(c), for DoD, NASA, and the Coast Guard—

(A) The contracting officer may choose not to include price or cost as an evaluation factor for award when a solicitation—

(1) Has an estimated value above the simplified acquisition threshold;

(2) Will result in multiple-award contracts (see subpart 16.5) that are for the same or similar services; and

(3) States that the Government intends to make an award to each and all qualifying offerors (see 2.101).

FAR 15.304(c)(1) (emphasis added).

The Solicitation has an estimated value above the simplified acquisition threshold, the intention is to award multiple-award contracts for similar services, and it expressly states that “[t]he Government intends to make an award to each and all qualifying Offerors.” See Solicitation at 92.

The Solicitation goes on to state that:

In accordance with FAR 2.101, a qualifying Offeror means an Offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation, and the Contracting Officer has no reason to believe would be likely to offer other than fair and reasonable pricing.

Id. As FAR 15.304(c)(1)(ii) itself notes and mandates, the exception is founded upon the language in 10 U.S.C. § 3206(c)(3). That statute reads:

(3) Exceptions for certain multiple task or delivery order contracts.--If the head of an agency issues a solicitation for multiple task or delivery order contracts under section 3403(d)(1)(B) of this title for the same or similar services and intends to make a contract award to each qualifying offeror--

(A) cost or price to the Federal Government need not, at the Government's discretion, be considered under paragraph (1)(B) as an evaluation factor for the contract award; and

(B) if, pursuant to subparagraph (A), cost or price to the Federal Government is not considered as an evaluation factor for the contract award-

(i) the disclosure requirement of paragraph (1)(C) shall not apply;

and

(ii) cost or price to the Federal Government shall be considered in conjunction with the issuance pursuant to section 3406(c) of this title of a task or delivery order under any contract resulting from the solicitation.

(4) Definition.--In paragraph (3), the term “qualifying offeror” means an offeror that--

(A) is determined to be a responsible source;

(B) submits a proposal that conforms to the requirements of the solicitation;

and

(C) the contracting officer has no reason to believe would likely offer other than fair and reasonable pricing.

10 U.S.C. § 3206(c) (emphasis added).2

The problem is that the authorizing regulation and statute is for a non-competitive acquisition structure. The regulation clearly was intended to allow for an exception to evaluating price so long as award is going to all proposals that meet the minimum technical requirements for performance. The language of 10 U.S.C. § 3026(c) makes this clear, an offeror is a qualifying offeror if it meets the other two requirements, and its proposal conforms to the requirements of the solicitation. This is not language that is usable for a competitive acquisition. In DoD’s own commentary on 15.304(c)(1)(ii), it noted:

The terms “technically acceptable” and “conforms” have different meanings to Government contracting personnel. A proposal can conform to the requirements for the solicitation (e.g., meeting a required page limit or proposal format), but not demonstrate that the offeror can meet the stated technical requirements (e.g., having necessary certifications or offering the requisite services) of the Government. This clarification ensures contracting officers, when using the authorities in section 825, also evaluate whether a proposal meets the minimum technical requirements stated in the solicitation.

2 The same definition for “qualifying offeror” is found in FAR 2.101.

Federal Acquisition Regulation: Evaluation Factors for Multiple-Award Contracts, 85 Fed. Reg.

40068-01 (July 2, 2020) (emphasis added).3 The Solicitation undermines this. It goes against the language in FAR 15.304(c)(1)(ii)(A) that requires that the solicitation must state “that the Government intends to make an award to each and all qualifying offerors.” It tries to get around the fact that all otherwise acceptable proposals that meet the minimum technical requirements should receive the award by making winning the competition a technical requirement of performing the contract. The effect is that offerors are competing despite DHA using an acquisition procedure that is improper for competition.

As observed in commentary on FAR 15.304(c)(1)(ii):

The rules about competition in contracting are in FAR Part 6, “Competition Requirements.” FAR 6.101 instructs Contracting Officers to “promote and provide for full and open competition in soliciting offers and awarding Government contracts.” FAR 2.101 defines “full and open competition” as follows: “Full and open competition, when used with respect to a contract action, means that all responsible sources are permitted to compete.” The FAR does not define “compete,” so we apply the rule in FAR 1.108(a) about the definition of words that FAR does not define and resort to “common dictionary meanings.” The American Heritage Dictionary of the English Language, 5th ed., defines “compete” as follows: “To strive against another or others to attain a goal, such as an advantage or victory. See Synonyms at rival.” See also Webster's Third New International Dictionary (Unabridged): “1: to seek or strive for something (as a position, possession, reward) for which others are also contending: vie with another or others for or as if for a prize… 2 a: to stand comparison (as in fitness or value) b: to come into rivalry esp. in economic value, usefulness, or efficiency

The acquisition procedure described in FAR 15.304(c)(1)(ii) is clearly authorized by statute and regulation. Nevertheless, it cannot promote or provide for full and open competition. Offerors responding to such a solicitation will not strive against one another to win a contract, nor will they “stand comparison.” Instead, they will seek only to “qualify” for an award (1) by being found “responsible” as specified in FAR Subpart 9.1, “Responsible Prospective Contractors”; (2) by submitting a “technically acceptable” (pass or fail) proposal; and (3) by giving the CO no reason to think they would not offer fair and reasonable prices for task or deliver orders.

Thus, the procedure is not competitive.

It seems clear to us that the phrase “each and all” means just that. We do not think it permits agencies to “cap” the number of awards or do a workaround by making a competitive range determination that cuts off any “qualifying offerors.”

3 The authority for the exception is based on Section 825 of the 2017 National Defense Authorization Act, as noted in the cited register commentary.

35 Nash & Cibinic Rep. NL ¶ 55.

The Solicitation unreasonably expands the exception created by FAR 15.304(c)(1)(ii). It redefines “qualifying offeror” even though that phrase is statutorily defined as “a responsible source” that “submits a proposal that conforms to the requirements of the solicitation;” and is not reasonably likely to “offer other than fair and reasonable pricing.” FAR 15.304(c)(1)(ii) is controlled by 10 U.S.C. § 3206. The government cannot redefine “qualifying offeror” without breaching the provisions of 10 U.S.C. § 3206.

The intent of the exception in FAR 15.304 and 10 U.S.C. § 3206 is to allow agencies to avoid evaluating price in depth if they are going to give IDIQs to all technically acceptable offerors anyways by using a pass-fail competition. It is not designed to allow agencies to twist the definition of “technically acceptable” so as to make a competition out of a non-competitive award determination process. 10 U.S.C. § 3206 expressly defines “qualifying offeror” as an offeror that “is determined to be a responsible source, submits a proposal that conforms to the requirements of the solicitation; and the contracting officer has no reason to believe would likely offer other than fair and reasonable pricing.” DHA cannot then simply redefine “qualifying offeror” to mean “an offeror with one of the ten best technical scores” and say that those who are responsible sources with a technically acceptable proposal are not qualified. The competition is reserved for when the awardees seek task orders under the IDIQ. Instead, the Solicitation takes an exception to price evaluation meant for use when award is to be made to all technically acceptable proposals and redefines “technically acceptable” in a manner that basically turns the exception into the new standard for all multiple award IDIQs the DoD will issue.4 It redefines “qualifying offeror” in violation of 10 U.S.C. § 3206. This goes against the intent of the rule and this protest should be sustained as a result.

B. Award under the Solicitation is to be made on a best value basis as the Solicitation is required to include FAR 52.215-1 under FAR 15.209, which conflicts with the non-competitive award structure.

The Solicitation expressly states that “[t]he Government intends to award without discussions.” Solicitation at 92. Certainly, DHA has the discretion to not engage in discussions.

But this statement means that FAR 15.209 applies here. DHA has chosen to contract by negotiation and at least claims this solicitation is competitive. “When contracting by negotiation— (a) The contracting officer shall insert the provision at 52.215–1, Instructions to Offerors—Competitive

4 Furthermore, DHA must consider that because it is stating that a proposal that is outside the top 10 for technical capability self-scoring is “technically unacceptable,” this makes technical capability a non-comparative basis. This opens the door to rejected offerors requesting Certificates of Competency (COCs) from SBA:

A contracting officer must refer a small business concern to SBA for a possible COC, even if the next apparent successful offeror is also a small business, when the contracting officer:… Refuses to consider a small business concern for award of a contract or order after evaluating the concern's offer on a non-comparative basis (e.g., a pass/fail, go/no go, or acceptable/unacceptable) under one or more responsibility type evaluation factors (such as experience of the company or key personnel or past performance)…

13 C.F.R. § 125.5.

Acquisition, in all competitive solicitations where the Government intends to award a contract without discussions.” FAR 15.209. Therefore, DHA is required to include FAR 52.215-1 in the Solicitation.

This has a major effect on the Solicitation. The regulatory language states: “The Government intends to award a contract or contracts resulting from this solicitation to the responsible offeror(s) whose proposal(s) represents the best value after evaluation in accordance with the factors and subfactors in the solicitation.” FAR 52.215-1(f). This language is supposed to be in the Solicitation according to the FAR, and this language mandates that DHA make its award determination on a best value basis. If the Solicitation does not provide that the award determination will be made on a best value basis, it violates federal regulation.

But as discussed above, DHA has attempted to utilize a non-competitive system that does not in any way involve a best value determination. Even if the agency did not attempt to redefine “qualifying offeror,” the solicitation would still violate the FAR as it then does not provide for any sort of comparison whatsoever. Sagecare, supra. GAO, moreover, will sustain a protest where an agency fails to meaningfully consider an offeror’s cost or price as part of the award determination.

See, e.g., The MIL Corp., B-294836, 2005 CPD ¶ 29 (Comp. Gen. Dec. 30, 2004).5 It is inherently impossible for there to be a determination of “best value” without comparison. “FAR Part 15 describes a ‘best value continuum’ in which the importance of cost or price relative to technical or past performance considerations may vary in different types of acquisitions.” § 6:25. “Best value” source selection, Government Contract Guidebook § 6:25 (4th ed.) The importance of these factors can only vary if there’s competition. In the non-competitive procedures provided by FAR 15.304(c) and 10 U.S.C. § 3204, price is neither more nor less important than the technical factor.

There is no comparison occurring. As such, the procedure cannot be describe as seeking the “best value.”

C. The Solicitation impermissibly allows mentor-protégé joint ventures to rely on the past performance of the mentor (as well as subcontractors) alone with no requirement of the protégé.

SBA’s “rules require a small business protégé to have some experience in the type of work to be performed under the contract.” MiamiTSPi, LLC--Reconsideration, B-421216.3 (May 11, 2023) (quoting Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments, 85 Fed. Reg. 66146-01). It is true that “[a] procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.” 13 C.F.R. § 125.8(e). “[T]he protégé firm ‘must, however, bring something to the table other than its size or socio-economic status.’” MiamiTSPi, supra. (quoting Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments, 85 Fed. Reg. 66146-01). “Even though the regulations do not mandate a specific degree of consideration, it is clear that the agency must consider to some degree the experience of both partners of the joint venture.” Id.

5 As noted above, the Solicitation doesn’t properly invoke the exception to use of price as part of the evaluation.

When a protester challenges a specification, the procuring agency has the responsibility of justifying that the specification is reasonably necessary to meet its needs. Pitney Bowes, Inc., B- 413876.2, 2017 CPD ¶ 56 (Comp. Gen. Feb. 13, 2017) (citing Smith and Nephew, Inc., B-410453, 2015 CPD ¶ 90 (Comp. Gen. Jan. 2, 2015). Where a solicitation term either “disadvantages the protester” or “fails to fulfill the agency’s objective”, GAO will sustain a protest of a challenge to the unreasonable solicitation terms. Aes Uxo, LLC, B-419150, 2020 CPD P 395 (Comp. Gen. Dec.

7, 2020).

The language in the Solicitation improperly allows for a mentor-protégé joint venture to submit a proposal in which the protégé provides no past performance and still receive award. It states:

The evaluation will consider past performance information regarding predecessor companies and major subcontractors that will perform major or critical aspects of the requirement when such information is recent and relevant to this acquisition.

Past performance information from the prime Offeror’s major subcontractors, teaming or joint venture partners will be treated the same as any prime Offeror’s past performance information.

Solicitation at 95 (emphasis added). There is nothing objectionable about DHA stating it will consider the past performance of partners and subcontractors. That is within its discretion. The problem is that the second sentence means all past performance references from major subcontractors, teaming partners, and joint venture partners are required to be treated just as if it was a submission by the prime offeror.

This creates a problem in the context of the mentor-protégé joint venture in particular. The language does state that “A minimum of one (1) past performance reference shall reflect work performed by the prime Offeror, as either a prime Contractor or subcontractor for each AOR within which the Offeror is competing.” Id. at 74.6 However, as the prime Offeror is a mentor-protégé joint venture in this situation, this means that the offeror could simply submit a past performance example from the mentor alone, and it meets the requirement. The rest of the examples could come from the mentor or subcontractors of the joint venture. The protégé, then, brings nothing to the table except its size and socio-economic status to enable the mentor to receive award.

This is also inconsistent with the Solicitation language stating: “The responsibilities of the managing partner are significantly more important than the responsibilities of all other partners combined.” Id. at 71. This is not an evaluation criterion, as it’s not in the evaluation section of the Solicitation. Furthermore, it doesn’t define if managing partner refers only to a prime contractor, or a joint venture managing partner. Plus, it’s not clear if this even relates to past performance evaluation or not.

The result is that SBA’s intent behind the mentor-protégé program is thwarted as mentors would be able to make otherwise acceptable offers with the mentor-protégé joint venture where

6 This language is not in the evaluation criteria, which allows the agency to rely solely on subcontractor or joint venture partner experience. In addition, it creates an inconsistency in the language between the two provisions and DHS should clarify and remedy this inconsistency.

the protégé brings nothing to the contract besides its size and socio-economic status. This is precisely what SBA wanted to avoid as its commentary on the program shows. This is in violation of 13 C.F.R. § 125.8, and GAO should sustain this protest accordingly.

As noted above, the Solicitation states “Past performance information from the prime Offeror’s major subcontractors, teaming or joint venture partners will be treated the same as any prime Offeror’s past performance information.” Solicitation at 95. Compare this language to language that was upheld:

The Government will consider Past Performance information for the entity proposed as the prime contractor, as well as information for proposed subcontractors that will perform major or critical aspects of the requirement, when such information is relevant to this procurement. However, greater emphasis may be placed on the past performance of the prime contractor.

Mgmt. & Training Corp. v. United States, 161 Fed. Cl. 578, 587 (2022). There the agency’s “representation that it reserved the right to place greater emphasis on the past performance of the primary contractor” clearly showed that it had discretion to “assign whatever weight to subcontractor past performance it believed appropriate.” Id. If this language stated that subcontractor past performance may be considered in a manner equivalent to an offeror’s past performance, or gave DHA the discretion to treat the past performance differently, this language would be akin to that in Mgmt. & Training Corp.

Similarly, it is “clearly reasonable for [an agency] to decide that an offeror under a services contract may not rely entirely on its subcontractor's experience when, given the restriction on subcontractor participation in performance of the contract under FAR § 52.219–14, the offeror itself will be required to expend at least 50 percent of the labor costs under the contract for its own employees.” Innovative Tech. Sys., Inc., B-260074 (May 24, 1995). This Solicitation does include FAR 52.219–14, meaning it is unreasonable to allow subcontractors to supply all, or the vast majority of, the experience. See Solicitation at 25.7

But the language in this Solicitation allows for no such discretion and therefore unreasonably restricts the government’s own discretion in a way that could be detrimental to offerors such as Maxmed. Here, the language mandates that DHA treat all major subcontractor past performance exactly the same as prime offeror performance, regardless of the details of that past performance. This creates a serious and obvious problem: An offeror that has terrible past performance will be treated exactly the same as an offeror with mostly good past performance if it has a major subcontractor with enough relevant past performance, thereby prejudicing offerors

7 Also, SBA rules provide specific situations in which an agency must consider past performance of subcontractors:

“When an offer of a small business prime contractor includes a proposed team of small business subcontractors and specifically identifies the first-tier subcontractor(s) in the proposal, the head of the agency must consider the capabilities, past performance, and experience of each first tier subcontractor that is part of the team as the capabilities, past performance, and experience of the small business prime contractor if the capabilities, past performance, and experience of the small business prime does not independently demonstrate capabilities and past performance necessary for award.” 13 C.F.R. § 125.2(g). The Solicitation language doesn’t limit its use of subcontractor experience to a small business team.

with more prime contractor experience and less subcontractor experience. This is patently unreasonable, especially for a contract that involves the staffing of medical professionals. It could result in a situation in which an offeror with a history of terrible past performance in this work is treated the same as an offeror who has excellent past performance in the work, just because the former found a number of subcontractors who have done the work before and is able to thus bolster their past performance.

This presents a tremendous risk to the government and to our nation’s military personnel that the staffing of military doctors and nurses will be overseen by a company with a history of terrible prime contractor past performance in conducting such work. Because award will only go to the top ten in terms of the self-scored technical capability worksheet, the situation could very easily arise where an offeror has enough experience to score very well on the worksheet (which does not factor in how well the offeror performed), but then relies on the past performance of its subcontractors as its own past performance history is poor. The result is an inherently unreasonable situation in which an offeror with a history of poor past performance could very well be awarded over an offeror with a history of good past performance. The potential for such a clearly unreasonable outcome should result in GAO sustaining this protest.

V. DHA’s solicitation errors prejudice Maxmed.

Finally, as GAO routinely notes, prejudice is an essential component of any successful protest. Battelle Mem’l Inst., B-418047.3 et al., 2020 WL 2836276 (Comp. Gen. May 18, 2020).

GAO will not sustain a protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency’s actions, “that is, unless the protester demonstrates that, but for the agency’s actions, it would have had a substantial chance of receiving the award[.]” Ashe Facility Servs., B-292218.3 et al., 2004 CPD ¶ 80 (Comp. Gen. Mar. 31, 2004).

No matter how it is viewed, the Solicitation prejudices Maxmed in some way unless the award determination structure and past performance evaluation structure are completely redone. If DHA’s attempt to redefine “qualifying offeror” in contradiction of federal statute and cap awards is permitted, the result is that Maxmed is more likely to not receive an award as it then faces competition for ten spots. Such competition should not exist as the only reason there would be a limited number of awards is because the terms of the Solicitation violate federal statute. On the other hand, even if the non-competitive language is permitted, Maxmed would still be prejudiced as then it will face further competition for future task orders under the contract vehicle that it would not face if the Solicitation was competitive in a manner that did not violate 10 U.S.C. § 3204 and

FAR 15.304.

As for the matter of past performance, the fact that subcontractor past performance will be treated as if it is prime offeror past performance means that even if the award determination structure is redone, numerous undeserving offerors would be in contention for award by relying on the past performance of their subcontractors. This necessarily and improperly lowers the chance that Maxmed would receive award of task orders. And if the award determination structure isn’t redone, then Maxmed is less likely to receive award in this contract over undeserving offerors.

Maxmed is prejudiced either way.

VI. Relevant document requests.

DHA’s production of all relevant documents should include, but not necessarily be limited to the production of:

1. All documentation of DHA’s reasoning for how it structured the Solicitation.

2. Responses to Maxmed’s argument that the Solicitation fails to comply with statutory and regulatory law and is unreasonably restrictive.

3. All documents and information responsive to Solicitation concerns raised in this

Protest.

4. Any other documents upon which DHA based its Solicitation terms, including but not limited to procurement planning documents and market research.

VII. Conclusion and relief requested.

For the reasons stated herein, GAO should find the Solicitation terms to be noncompliant with existing law and unreasonable. In doing so, GAO should recommend the agency take appropriate action to remove the unreasonable provisions from the Solicitation.

Respectfully submitted, Shane J. McCall Nicole D. Pottroff John L. Holtz Stephanie L. Ellis Greg P. Weber

KOPRINCE MCCALL POTTROFF LLC

npottroff@koprince.com smccall@koprince.com jholtz@koprince.com sellis@koprince.com gweber@koprince.om

Counsel for Maxmed Healthcare, Inc.