Unitedhealth Military & Veterans Services, LLC v. United States ( 2017 )


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  •                                REDACTED OPINION
    In the United States Court of Federal Claims
    No. 16-1536C
    Filed: May 30, 2017
    Redacted Version Issued for Publication: July 10, 20171
    * * * * * * * * * * * * * * * * **
    UNITEDHEALTH MILITARY &                   *
    VETERANS SERVICES, LLC,                   *
    *
    Protestor,             *
    *
    v.
    *
    UNITED STATES,                            *
    *
    Defendant,                 Post-Award Bid Protest; Cross
    *
    Motions for Judgment on the
    v.                                        *
    Administrative Record; Price
    *
    HEALTH NET FEDERAL SERVICES,                  Realism.
    LLC,                                      *
    *
    Defendant-Intervenor,     *
    v.                                        *
    *
    HUMANA GOVERNMENT
    *
    BUSINESS, INC.,
    *
    Defendant-Intervenor.     *
    * * * * * * * * * * * * * * * * **
    Jason A. Carey, Covington & Burling LLP, Washington, D.C., for protestor. With
    him were Alan A. Pemberton, Jennifer L. Plitsch, Scott A. Freling, Jason N.
    Workmaster, John W. Sorrenti, Alexander B. Hastings, Bryan M. Byrd, and
    Kassandra D. Maldonado, Covington & Burling LLP, Washington, D.C.
    William P. Rayel, Senior Trial Counsel, Commercial Litigation Branch, Civil
    Division, United States Department of Justice, Washington, D.C., for defendant. With him
    were Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Robert E.
    Kirschman, Jr., Director, Commercial Litigation Branch, and Chad A. Readler, Acting
    Assistant Attorney General, Civil Division, Department of Justice. Of counsel were
    Rhonda L. Bershok and Michael E. Jonasson, Office of General Counsel, Defense
    Health Agency.
    1 This opinion was issued under seal on May 30, 2017. The parties were asked to propose
    redactions prior to public release of the opinion. This opinion is issued with the redactions
    that the parties proposed in response to the court’s request. Words and numbers which
    are redacted are reflected with the notation: “[Redacted].”
    Thomas P. Humphrey, Crowell & Moring LLP, Washington, D.C. for defendant-
    intervenor Health Net Federal Services, LLC. With him were John E. McCarthy Jr., Mark
    A. Ries, James G. Peyster, Jacinta L. Alves, Robert J. Sneckenberg, and Hart W.
    Wood, Crowell & Moring LLP, Washington, D.C.
    Paul R. Hurst, Steptoe & Johnson, LLP, Washington, D.C. for defendant-
    intervenor Humana Government Business, Inc. With him were Peter L. Wellington,
    Thomas P. Barletta, Sharon L. Larkin, Michael N. Navarre, Raquel N. Parker,
    Nicholas Petts, and Rebecca A. Lipe, Steptoe & Johnson LLP, Washington, D.C. Also
    with him was Daniel P. Graham, Vinson & Elkins LLP, Washington, D.C.
    OPINION
    HORN, J.
    The protestor, UnitedHealth Military & Veterans Services, LLC (M&V), filed a post-
    award bid protest in this court challenging the decision of defendant, the United States,
    through the United States Department of Defense, Defense Health Agency (DHA), to
    award two Managed Care Support (MCS) contracts for health, medical, and
    administrative support services for TRICARE-eligible beneficiaries to defendant-
    intervenors, Humana Government Business, Inc. (Humana) and Health Net Federal
    Services, LLC (Health Net). Protestor filed suit in the United States Court of Federal
    Claims after the United States Government Accountability Office (GAO) issued a decision
    denying M&V’s protest. See generally UnitedHealth Military & Veterans Servs., LLC, et
    al., B-411837.2 et al., 
    2016 WL 6821970
     (Comp. Gen. Nov. 9, 2016).
    TRICARE Program Background
    This bid protest challenges the award of the “T-2017” procurement for MCS
    services for the United States Department of Defense TRICARE program, which is the
    United States Department of Defense’s managed healthcare program for service
    members, retirees, and their families and survivors.2 The total non-overseas population
    of TRICARE-eligible beneficiaries in the United States was estimated by DHA in its
    acquisition strategy memorandum as approximately 9.2 million. Under the TRICARE
    program, the Department of Defense provides healthcare through military treatment
    facilities (MTFs) or reimburses private sector healthcare providers for healthcare services
    provided to eligible beneficiaries. The DHA is responsible for operating the TRICARE
    2The statute at 
    10 U.S.C. § 1072
    (7) (2012) defines the “TRICARE program” as the
    managed healthcare program that is established by the Department of Defense under the
    authority of Title 10 Chapter 55 of the United States Code. Pursuant to regulation, the
    TRICARE program is established for the purpose of implementing a comprehensive
    managed healthcare program for the delivery and financing of healthcare services in the
    military health system. See 
    32 C.F.R. § 199.17
    (a) (2017).
    2
    program.3
    Because the military’s direct healthcare system does not fully satisfy the military’s
    healthcare needs, the Department of Defense awards contracts to MCS contractors to
    support the military health system and to optimize the delivery of healthcare services to
    all TRICARE-eligible beneficiaries. MCS contract services include:
    [E]stablishing civilian provider networks in designated geographic areas
    that meet statutorily-defined access standards for TRICARE Prime
    enrollees; providing comprehensive health care services to Prime enrollees
    whose primary care managers are TRICARE network providers and to
    users of TRICARE Extra and Standard; assisting military treatment
    facility . . . Commanders in optimizing healthcare delivery in the direct care
    system, providing referrals for specialty services to an MTF provider prior
    to a civilian provider; enrolling beneficiaries in PRIME; paying healthcare
    claims for private sector medical services rendered to TRICARE eligibles;
    providing customer service and beneficiary/provider education activities for
    all TRICARE eligibles; and disease management.
    As the acquisition strategy for the “T-2017” procurement explained, “[t]his
    acquisition is to purchase administrative and support services for the receipt of health
    care from the private sector and for the integration of that private sector care with the DoD
    [Department of Defense] direct care system.”
    The “T-2017” procurement follows the current TRICARE contracts, referred to as
    TRICARE Third Generation, or “T-3” contracts, and the “T-2017” procurement represents
    the fourth generation of such MCS contracts since 1996. The “T-3” contracts have been
    held by three separate MCS contractors, each responsible for one region of the country:
    North, South, or West. Humana, Health Net, and M&V are the current TRICARE
    incumbent contractors performing the “T-3” contracts. Health Net holds the “T-3” contract
    for the North Region, Humana holds the “T-3” contract for the South Region, and M&V
    holds the “T-3” contract for the West Region. Distinct from the earlier “T-3” contracts, and
    as discussed further below, the “T-2017” procurement, at issue in this bid protest, divided
    the country into two regions, East and West.4 The “T-2017” procurement contemplated
    that DHA would award two “T-2017” contracts, one for the East Region and one for the
    West Region.
    3Under the TRICARE program, beneficiaries elect one of three options: TRICARE Prime,
    TRICARE Extra, or TRICARE Standard.
    4 The Source Selection Plan for the “T-2017” procurement explains that DHA intends to
    award only two regional contracts in order to “achieve financial and administrative
    efficiencies and to keep MCS contracts synchronous.”
    3
    The “T-2017” Solicitation
    To initiate the “T-2017” procurement, DHA issued Request for Proposals No.
    HT9402-15-R-0002 (the solicitation) on April 24, 2015, seeking two MCS contractors to
    “assist the Military Health System (MHS) in operating an integrated healthcare delivery
    system combining resources of the military’s direct medical care system and the
    Contractor’s managed care support to provide health, medical and administrative support
    services to TRICARE-eligible beneficiaries.”5 Under the “T-2017” contracts, the
    contractors would be required to perform the services necessary to support the TRICARE
    program, including establishing and maintaining provider networks, managing referrals
    between the military treatment facilities and the civilian network, managing beneficiary
    enrollment, providing medical management services, providing readily accessible
    customer service, and processing claims. Section C of the solicitation set forth four
    contract objectives: readiness, experience of care, manage per capita cost, and
    population health.
    According to the solicitation, DHA intended to conduct a best value source
    selection and award two contracts, “consisting primarily of cost-plus fixed-fee types, with
    fixed-price elements, cost reimbursable elements and performance incentive fees. . . .”
    DHA intended to select the best overall offer for the East and West Regions, “based upon
    an integrated assessment of technical/management, past performance, and price/cost
    factors.”6 The solicitation stated that DHA would “conduct a full and open competition after
    exclusion of sources in this solicitation to foster an adequate number of viable Contractors
    to reduce any risk to the stability of the administration of the TRICARE program, and to
    ensure the continuous availability of healthcare services for TRICARE beneficiaries.” The
    East Region Contract was to cover approximately 5.9 million TRICARE-eligible
    beneficiaries, and the West Region Contract was to cover approximately 2.9 million
    TRICARE-eligible beneficiaries.7 The solicitation explained that DHA would select two
    5 According to the acquisition strategy document included in the administrative record,
    prior to issuing the solicitation, “DHA conducted market research via requests for
    information (RFIs), an Industry Forum, and health care industry subject matter experts.”
    6Pursuant to 10 U.S.C. § 1073a(a) (2012), healthcare contracts must be awarded on a
    best value basis “to the maximum extent consistent with furnishing high-quality health
    care in a manner that protects the fiscal and other interests of the United States.”
    7 The East Region Contract was to include Alabama, Arkansas, Connecticut, Delaware,
    District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa (Rock Island Arsenal Area
    only), Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi,
    Missouri (St. Louis area only), New Hampshire, New Jersey, New York, North Carolina,
    Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas
    (excluding Western Texas), Vermont, Virginia, West Virginia, and Wisconsin. The West
    Region Contract was to include Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa
    (except the Rock Island Arsenal area), Kansas, Minnesota, Missouri (except the St. Louis
    area), Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota,
    4
    different prime contractors “even if a potential Contractor submits proposals for more than
    one contract region and each of the proposals is evaluated as the best value for the
    Government for the contract region of submission.” Although DHA intended to award two
    contracts to two different prime contractors, offerors were permitted to submit proposals
    on one or both regions. According to the solicitation, if an offeror was determined to have
    submitted best value proposals for both the East and West Regions, “the Offeror will be
    awarded the East Region contract, provided at least one other acceptable offer” was
    submitted for the West Region contract. The West Region contract would then go to the
    next best value proposal for the West Region. The “T-2017” contracts would consist of a
    base period of at least nine months, five one-year options periods, and a transition-out
    period.
    Relevant to this bid protest, the solicitation identified Contract Line Items (CLINs)
    for the work to be performed. CLINs X001 covered the reimbursable “Underwritten
    Healthcare Cost” for TRICARE Prime enrollees, non-Prime underwritten beneficiaries,
    and military treatment facility enrollees. As explained in Section H of the solicitation,
    contractors would be required to underwrite the cost of civilian healthcare services, and
    Section H detailed special contract requirements regarding the contractors’ financial
    underwriting of those healthcare costs.8 According to Section H, the contractors would be
    responsible for paying network provider claims for services rendered up to a Maximum
    Allowable Charge rate established by regulation.9 The solicitation explained that the
    underwritten healthcare costs paid by the contractors would be cost-reimbursable. The
    solicitation provided offerors with DHA’s estimated, underwritten healthcare costs for the
    base year and for each option period for each region, and offerors were instructed to use
    the DHA’s estimates in their proposals. The solicitation directed that an offeror “shall not
    propose its own estimated healthcare costs, but use those supplied by the Government.”
    (emphasis in original).
    To account for the risks associated with financially underwriting healthcare costs,
    the solicitation directed offerors to propose an “Underwritten Healthcare Fixed Fee,” or
    “underwriting premium.” This fixed fee for each option period was identified in CLINs
    X002. The solicitation provided that this fixed fee would not be “subject to change after
    contract award.” The solicitation also stated that the fixed fee would “not be subject to
    change as a result of changes to administrative efforts during contract performance,” nor
    would it “be subject to change for increases or decreases in healthcare cost estimates
    because of change orders issued during contract performance.”
    Texas (only Western Texas), Utah, Washington, and Wyoming.
    8By statute, contractors are required to financially underwrite the delivery of healthcare
    services under the TRICARE program. See 
    10 U.S.C. § 1072
    (7).
    9 The solicitation included a list of non-underwritten categories that were excluded from
    the requirement.
    5
    Section H of the solicitation also included the healthcare underwriting incentives
    for the MCS contractors. This section explained that the contractors “may earn an
    underwriting incentive by either exceeding a minimum standard, or for performance above
    a fully satisfactory level in areas that reduce healthcare cost and are measurable. . . .” In
    order to reduce the underwritten healthcare costs reimbursed by DHA (CLINs X001), the
    solicitation included a Network Discount Incentive and encouraged offerors to “proactively
    negotiate discounts with network providers.” By negotiating discount rates for healthcare
    services with network providers, the solicitation allowed offerors to propose a Guaranteed
    Network Provider discount for the base year and each option period of the contract, and
    explained that the contractor would be eligible to receive a financial incentive if the
    discount was exceeded during the life of the contract. These negotiated discount rates
    would lower the amount of underwritten healthcare costs that DHA would be required to
    reimburse the contractors under the terms of the contracts awarded. Offerors were to
    propose Guaranteed Network Provider discounts as percentage figures, not as fixed
    dollar amounts. In considering the proposals, the plug-in dollar amount that DHA had
    provided for CLINs X001 would be reduced by the percentage discount proposed by each
    offeror. According to the solicitation, “[t]he application of the Offeror’s guaranteed network
    provider discounts will be the only adjustments to the CLINs X001.” The solicitation
    explained that the Guaranteed Network Provider discount would be measured as an
    overall discount for care by civilian network providers, and that “[t]he difference between
    the Government’s estimate of Underwritten Healthcare Costs and the Offeror’s proposed
    discount amount is its proposed CLIN X001 Underwritten Healthcare Costs.” Therefore,
    each offeror’s Guaranteed Network Provider discount had the effect of reducing CLINs
    X001 for underwritten healthcare costs in their proposals, and, thus, reducing the total
    evaluated prices of the proposals.
    According to the solicitation, during contract performance, the achieved
    Guaranteed Network Provider discount would be calculated based on the overall average
    value of the actual discounts from TRICARE allowable charges. At the end of each option
    period, DHA would calculate the achieved dollar amount of the network discount by
    comparing the proposed Guaranteed Network Provider discount and what the TRICARE
    reimbursement methodology would have allowed in the absence of the negotiated
    discount rate. If the calculated average percentage discount for an option period is less
    than or equal to the proposed Guaranteed Network Provider discount, DHA would offset
    any dollar deficit from the next payment due to the contractor. If the calculated average
    percentage discount for an option period is greater than the proposed Guaranteed
    Network Provider discount, then DHA would pay an incentive amount to the contractor.
    Under the terms of the solicitation, the offerors assumed full financial risk for their
    proposed Guaranteed Network Provider discounts. The solicitation stated, in pertinent
    part:
    H.2.3.1.1.4. These guaranteed discounts shall not be adjusted for changes
    to TRICARE allowable amounts, the expansion of TRICARE coverage to
    additional procedures and Durable Medical Equipment (DME); or any other
    6
    actions and conditions that may affect providers’ willingness to accept
    discounts. The Contractor fully understands the risks in financially
    underwriting the delivery of healthcare services under this contract, and
    assumes all risks of future conditions and changes that may affect the
    Contractor’s ability to achieve the guaranteed discounts.
    (emphasis in original). The solicitation did not require offerors to submit supporting data
    or information as to the offerors’ approach to calculating the proposed Guaranteed
    Network Provider discounts.
    Also relevant to this bid protest, the solicitation included CLINs X003, which were
    fixed-price CLINs for administration services costs for the base year and each option year
    of the contract, including the costs for managing and administering the underwritten
    healthcare costs. The solicitation instructed offerors to propose a per member, per month
    (PMPM) unit price for CLINs X003 that accounted for all “program administration costs,”
    including “all effort necessary to perform all contract requirements unless otherwise priced
    in another CLIN.”
    The solicitation included, as Attachment L-7, the government estimate for “member
    months” for each option period and for each region. The value of CLINs X003 would be
    determined by multiplying the proposed PMPM unit prices by DHA’s estimated number
    of member months for each option period and region. The solicitation explained that,
    during contract performance, for each option year, DHA would “unilaterally determine” the
    number of eligible TRICARE beneficiaries twice, once during the first six months, and
    again for months seven through twelve. Using the number of eligible beneficiaries, DHA
    would calculate the “member months” for the sixth-month period by multiplying the
    number of eligible beneficiaries by the number of months (six). After determining the
    member months for each six-month period, DHA would multiply the number of member
    months by the offeror’s fixed PMPM price to determine the CLIN X003 amount for the
    option period. The other CLINs in the solicitation also included CLIN 0001 for the
    contractors’ transition-in effort, for which offerors were instructed to propose a firm fixed-
    price, and CLIN 9001 for the contractors’ transition-out efforts, for which offerors were
    instructed to propose a cost plus fixed fee.10
    Section L of the solicitation included proposal preparation instructions. Offerors
    were cautioned to follow the instructions provided in Section L and notified that proposals
    that take exception to the inclusion of specific requirements in the contract would not be
    considered. Similarly, offerors were instructed that non-conformance with the solicitation
    requirements could result in an unfavorable proposal evaluation or a rejection of the
    proposal. Pursuant to Section L of the solicitation, offerors were required to provide
    proposals comprised of five volumes for each region it chose to submit an offer. These
    volumes were to include an executed proposal, a technical proposal, information on past
    performance, a price/cost proposal, and a volume on financial data. Offerors were
    10 CLIN 9002 accounted for the fixed fee associated with the contractor’s transition-out
    efforts. The solicitation also included CLINs X004, X005, X006, and X007.
    7
    directed to submit technical proposals “which effectively demonstrate[d] the Offeror’s
    understanding of the requirements, and provide[d] a successful technical solution for the
    prospective contract.” Section L instructed that the “price/cost proposal, past performance
    information, and financial information shall not be addressed in the technical proposal
    volume, and no part of the technical proposal shall incorporate by reference portions of
    other volumes of the proposal.” Section L of the solicitation directed that the offerors’
    technical proposals should not address the proposed Guaranteed Network Provider
    discounts, and that the discounts should only be addressed in the price proposals.
    Further, the solicitation stated “[t]he Offeror’s proposed guaranteed network provider
    discount percentages, the calculated discount dollar amounts, and the resulting proposed
    Underwritten Healthcare Costs shall be clearly identified” in the price proposal.
    Section M of the solicitation set forth the evaluation criteria that DHA would employ
    to determine which proposal represented the best value to the agency for the East and
    West region contracts. Of particular relevance to this post-award bid protest, the
    solicitation explained:
    M.2.2. Unrealistic Proposals. The Government may reject any proposal
    that is evaluated to be unrealistic in terms of program commitments,
    contract terms and conditions such that the proposal is deemed to reflect
    an inherent lack of competence or failure to comprehend the complexity and
    risks of the program.
    M.2.3. Evaluation Approach. The Government will evaluate the extent to
    which the proposal exhibits a clear understanding of the work requirements
    and the means required to fulfill the requirements. The Government will also
    evaluate the extent to which the proposal demonstrates an ability to meet
    or exceed the requirements defined in the Request for Proposal (RFP) and
    the quality of service which is likely to result from implementation of an
    Offeror’s proposed methods.
    (emphasis in original). In the section that followed, Section M.3., the solicitation set forth
    the evaluation factors and subfactors:
    Factor 1-Technical/Management
    Subfactor 1-Network Management
    Subfactor 2-Referral Management
    Subfactor 3-Medical Management
    Subfactor 4-Customer Service
    Subfactor 5-Claims Processing
    Subfactor 6-Program Planning and Control
    Subfactor 7-Transition Management
    Factor 2-Past Performance
    Factor 3-Price/Cost
    Factor 4-Small Business Participation Factor
    (emphasis in original). For Factor 1, Technical Management, Subfactor 1, Network
    8
    Management, among other criteria, DHA intended to evaluate whether the offerors’
    network sizing model effectively considered the number of providers required, types of
    providers required, Military Treatment Facility capacity, and the beneficiary population.
    The solicitation required the contractors to “establish and maintain networks of individual
    and institutional providers for TRICARE Prime and Extra which produce the best quality
    clinical outcomes for TRICARE beneficiaries” and are “sufficient in number, mix, and
    geographic distribution to provide the full scope of benefits for which all Prime enrollees
    are eligible.” The provider networks also were required to satisfy certain access standards
    in Prime Service Areas for TRICARE Prime enrollees.
    As to Subfactor 2, Referral Management, DHA would evaluate the effectiveness
    of the offerors’ proposals for managing referrals between MTFs and the civilian network.
    Under Subfactor 3, Medical Management, DHA would evaluate the offerors’ proposed
    approach “for designing, implementing, and maintaining integrated, comprehensive
    medical management programs for all care received by TRICARE-eligible beneficiaries
    in the civilian sector and for complementing medical management services available
    within the MTF.” As to Subfactor 4, Customer Service, DHA would evaluate the offerors’
    proposed approaches to customer service to determine how well they provide “accurate,
    comprehensive customer information with knowledgeable, courteous, and responsive
    staff.” Under Subfactor 5, Claims Processing, DHA would evaluate the offerors’ proposals
    for the “inclusion of a readily adaptable, scalable claims processing system[s] which
    incorporat[e] industry best practices.” Regarding Subfactor 6, Program Planning and
    Control, DHA would evaluate the extent to which the offerors’ proposals demonstrate “an
    effective management approach for establishing and maintaining, throughout the life of
    the contract, qualified, experienced key personnel.” Under Subfactor 7, Transition
    Management, DHA would evaluate the proposals for an “effective Integrated Master
    Schedule and Integrated Master Plan (IMP/IMS) which meets or exceeds the Government
    transition requirements.”
    The solicitation explained that, for Factor 1, each subfactor would receive a
    Technical/Management rating and a proposal risk rating. These ratings were not
    consolidated into an overall factor rating. As to the technical rating, DHA would evaluate
    the quality of the offeror’s technical solution “for meeting the Government’s requirement.”
    The technical rating would be expressed as a color rating, either Blue/Outstanding,
    Purple/Good, Green/Acceptable, Yellow/Marginal, or Red/Unacceptable, as depicted in
    the following table:
    9
    TABLE M.5.1. – TECHNICAL RATINGS
    Color           Rating                                 Description
    Proposal meets requirements and indicates an exceptional
    Blue         Outstanding      approach and understanding of the requirements. The
    proposal contains multiple strengths and no deficiencies.
    Proposal meets requirements and indicates a thorough
    Purple           Good          approach and understanding of the requirements. Proposal
    contains at least one strength and no deficiencies.
    Proposal meets requirements and indicates an
    adequate approach and understanding of the
    Green          Acceptable
    requirements. Proposal has no strengths or
    deficiencies.
    Proposal does not clearly meet requirements and has not
    Yellow           Marginal       demonstrated an adequate approach and understanding of the
    requirements.
    Proposal does not meet requirements and contains one or
    Red          Unacceptable
    more deficiencies and is unawardable.
    With respect to the proposal risk rating for the subfactors, the solicitation stated
    that “[t]he Government will assess the degree to which the proposed approach has the
    potential for disruption of schedule, increased costs, degradation of performance, the
    need for increased Government oversight, and the likelihood of unsuccessful contract
    performance.” The proposal risk ratings were Low, Moderate, and High, as depicted in
    the following table:
    TABLE M.6.2. - TECHNICAL/MANAGEMENT RISK RATINGS
    Rating                                  Description
    Has little potential to cause disruption of schedule, increased
    cost or degradation of performance. Normal contractor effort
    Low
    and normal Government monitoring will likely be able to
    overcome any difficulties.
    Can potentially cause disruption of schedule, increased cost or
    degradation of performance. Special contractor emphasis and
    Moderate
    close Government monitoring will likely be able to overcome
    difficulties.
    Is likely to cause significant disruption of schedule, increased
    cost or degradation of performance. Is unlikely to overcome any
    High
    difficulties even with special contractor emphasis and close
    Government monitoring
    10
    With regard to Factor 2, Past Performance, offerors were required to submit
    information for the five largest contracts performed by the offeror, or by their first tier
    subcontractors, that were ongoing or had concluded within the three years prior to the
    date on which the solicitation was issued. DHA would assign a “performance confidence
    assessment rating relative to the Offeror’s ability to successfully perform the requirements
    of this solicitation,” as defined in the following table:
    TABLE M.8.5.2. - PERFORMANCE CONFIDENCE ASSESSMENTS
    Rating                            Description
    Based on the Offeror’s performance record, the
    SUBSTANTIAL
    Government has a high expectation that the Offeror will
    CONFIDENCE
    successfully perform the required effort.
    Based on the Offeror’s performance record, the Government
    SATISFACTORY
    has a reasonable expectation that the Offeror will
    CONFIDENCE
    successfully perform the required effort.
    Based on the Offeror’s performance record, the
    LIMITED
    Government has a low expectation that the Offeror will
    CONFIDENCE
    successfully perform the required effort.
    Based on the Offeror’s performance record, the Government
    NO CONFIDENCE            has no expectation that the Offeror will be able to
    successfully perform the required effort.
    No performance record is available or the Offeror’s
    UNKNOWN
    performance record is so sparse that no meaningful confidence
    CONFIDENCE
    assessment rating can be reasonably assigned.
    As to Factor 3, Price/Cost, under Section M.9.6., the solicitation provided that “[t]he
    Government will evaluate the Offeror’s TEP [total evaluated price] for reasonableness.
    Line items will also be reviewed for unbalanced pricing.” Section M.9.2. of the solicitation
    explained that DHA would evaluate Factor 3, Price/Cost, based upon DHA’s calculated
    total price for each proposal, which is the sum of the “extended amounts” for the base
    and all five option periods for “CLIN 0001 Transition-In, CLIN X001 Underwritten
    Healthcare Cost, CLIN X002 Underwritten Healthcare Cost Fixed Fee, SLIN X003AA and
    SLIN X003AB Per Member Per Month (PMPM), CLIN X005 Service Assist Teams, CLINs
    9001/9002 Transition-Out . . . and the calculated amount for the extension of services.”
    Section M.9.4. explained that DHA would evaluate the underwritten healthcare costs, as
    follows:
    M.9.4.1. CLIN X001Underwritten Healthcare Costs/CLIN X002
    Underwriting Fixed Fee:
    The Government has provided the reimbursable cost estimates for
    underwritten healthcare costs. The application of the Offeror’s guaranteed
    network provider discounts will be the only adjustments to the CLINs X001.
    The Government will make the adjustments to all offers according to the
    Price Evaluation Template, tab entitled Healthcare Cost & Discount. The
    11
    Offeror’s proposed underwriting fixed fee will not be subject to a most
    probable cost evaluation. It will be included as proposed in the Total
    Evaluated Price.
    (emphasis in original).
    Offerors were instructed to use the Price Evaluation Templates attached to the
    solicitation to present their proposed costs and prices. The solicitation included separate
    Price Evaluation Templates for the East Region and for the West Region. The Price
    Evaluation Templates were formulated to include DHA’s estimates with regard to
    Underwritten Healthcare Costs and the “Per Member Per Month (PMPM) eligible
    quantities for the two regions,” which offerors were to use as plug-in numbers. Offerors
    also were instructed to list their proposed staffing/man-loading in the Price Evaluation
    Templates as well as the number of Full Time Equivalents (FTEs) for each labor category
    and a breakdown of the FTEs by functional area. The solicitation stated that “the FTEs
    should reflect the Offeror’s proposed man-loading.” According to the Source Selection
    Plan, due to the complexities associated with the PMPM CLINs and the anticipated
    proposed Guaranteed Network Provider discount provisions, the solicitation also required
    that “‘Data Other than Certified Cost or Pricing Data’ shall be submitted by the Offeror to
    support the price reasonableness of its proposal,” and offerors were directed to include
    in their proposal a “Price/Cost Proposal Narrative” discussing their proposed PMPM
    prices and transition prices. At the conclusion of Section L was a “Cost Note” that stated:
    “The Government reserves the right to request additional information in support of any
    proposed cost, as required for a reasonableness determination.” (emphasis in original).
    Factor 1 (Technical/Management) and Factor 2 (Past Performance) were of equal
    weight and, individually, were each more important than Factor 3 (Price/Cost). When
    combined, Factors 1 and 2 were significantly more important than Factor 3, Price/Cost.
    Factor 4 (Small Business Participation) was evaluated on an acceptable/non-acceptable
    basis. With regard to the technical subfactors, Subfactor 6 (Program Planning and
    Control) was the most important. Subfactor 7 was less important than Subfactor 6, but
    more important than Subfactors 1, 2, 3, 4, and 5 individually. Subfactors 1 through 5 were
    weighted equally.
    Prior to issuing the solicitation, DHA conducted market research and developed
    an Independent Cost Estimate (ICE). DHA hired an outside consultant to develop the ICE,
    which was determined to be $45,697,536,533.00 for the East Region contract and
    $19,902,918,734.99 for the West Region contract. The ICE estimated an average PMPM
    price of $8.81 in the East Region and $9.89 in the West Region. The ICE estimated further
    that performance of the services in Option Period 1 would require 2,085 Full Time
    Equivalents in the West Region and 4,013 Full Time Equivalents in the East Region.
    The solicitation was issued on April 24, 2015. Subsequently, DHA issued seven
    amendments and received 250 questions from potential offerors prior to the proposal
    deadline. During the pre-proposal question-and-answer period, M&V submitted the
    following inquiry:
    12
    The RFP does not require submission of Certified Cost or Pricing Data, but
    does require submission of data other than Certified Cost or Pricing Data.
    The RFP further indicates that the Government will evaluate an offeror's
    Total Evaluated Price (TEP) for reasonableness and the FAR [Federal
    Acquisition Regulation] indicates that price analysis shall be used when
    Certified Cost or Pricing Data are not required. Price analysis is the process
    of examining and evaluating a proposed price without evaluating its
    separate cost elements and proposed profit. Section L appears to require
    offerors to submit data and information that is required for a price realism
    analysis, but not a price reasonableness analysis. Will the government
    clarify its price evaluation methodology and amend the RFP to remove from
    section L.8 the need for offerors to submit schedules, templates, narratives,
    and other documentation regarding the individual cost element components
    of the offered price for CLINs where the Government will evaluate the
    offeror’s price based on a price reasonableness analysis?[11]
    In response to the question, DHA stated: “The solicitation requirements remain the same,
    calling for the submission of Data Other Than Certified Cost or Pricing Data.”
    Four offerors submitted proposals for the East Region contract, including M&V,
    Humana, Health Net, and WellPoint Military Care Corporation (Wellpoint).12 Three
    offerors submitted proposals for the West Region contract, including M&V, Humana, and
    Health Net. After receiving the proposals, DHA conducted initial evaluations and,
    subsequently, established a competitive range and engaged in in-person discussions with
    the offerors. Offerors submitted final proposal revisions on February 16, 2016.
    The proposals submitted in response to the solicitation were evaluated by a source
    selection team that included a Source Selection Evaluation Board, a Source Selection
    Advisory Council, and a Source Selection Authority. The Source Selection Evaluation
    Board consisted of three independent evaluation teams, the Technical Evaluation Team
    (TET), a Past Performance Evaluation Team (PPET), and a Price/Cost Team (P/CT).13
    The TET was divided into four sub-teams, with each team addressing one or two
    subfactors based on the subject matter expertise of its members. The first TET sub-team
    evaluated network management and referral management, the second TET sub-team
    evaluated medical management, the third TET sub-team evaluated customer service and
    claims processing, and the fourth TET sub-team evaluated program planning and control
    11Section L of the solicitation required that “‘Data Other than Certified Cost or Pricing
    Data’ shall be submitted by the Offeror to support the price reasonableness of its
    proposal.”
    12WellPoint intervened in the GAO protest, but is not a party in the above-captioned bid
    protest.
    13 According to the SSA’s source selection documentation, the contracting officer
    evaluated Factor 4, Small Business Participation.
    13
    and transition management. The offerors’ final proposal revisions were evaluated by the
    sub-teams within the TET, the other members of the Source Selection Evaluation Board,
    and the Source Selection Advisory Council.
    The Source Selection Evaluation Board’s evaluation findings were contained in
    two Source Selection Evaluation Board consensus reports, one for the East and West
    Regions. In the reports, the Chairperson of the Source Selection Evaluation Board
    summarized the evaluation findings of the TET, the PPET, and the P/CT. The proposals
    and the evaluation record were then reviewed by the Source Selection Authority, who
    prepared two Source Selection decision documents, to support the award decisions for
    the East and West Region contracts. The Source Selection Authority decision documents
    for both the East Region and West Region contract awards, which were 242 pages and
    176 pages in length, respectively, demonstrated a lengthy and carefully considered
    evaluation process.
    East Region Evaluation
    The following table represents the offerors’ final proposed prices for the East
    Region contract in comparison to the ICE:
    EAST Region:                 Total Evaluated Price        Percent Difference from
    ICE
    Health Net                   $40,170,839,651.00           -12.1%
    Humana                       $40,517,947,263.00           -11.3%
    WellPoint Medical            $40,712,000,000.00           -10.9%
    M&V                          $43,073,480,195.00           -5.7%
    ICE:                         $45,697,536,533.00
    The total evaluated prices, as depicted above, were affected in large part by the
    offerors’ proposed Guaranteed Network Provider discounts (CLINs X001), as well as the
    proposed PMPM administrative costs (CLINs X003). Regarding CLINs X001 for
    underwritten healthcare costs, the following chart shows the Guaranteed Network
    Provider discounts that each offeror proposed and the projected impact on the total
    underwritten healthcare costs for each option period:
    14
    EAST Region    Option 1          Option 2          Option 3       Option 4         Option 5
    Government-
    provided        $6,705,544,670    $6,705,544,670
    $7,050,846,329
    $6,705,544,670
    $7,050,846,329
    $7,437,165,937
    $6,705,544,670
    $7,050,846,329
    $7,437,165,937
    $7,826,317,061
    $6,705,544,670
    $7,050,846,329
    $7,437,165,937
    $7,826,317,061
    $8,232,448,8
    $7,05
    $7
    estimate
    underwritten
    healthcare
    costs (UHCC)
    Health Net
    Proposed       [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    Discount
    Health Net
    proposed
    [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    UHCC
    Humana
    Proposed       [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    Discount
    Humana
    Proposed       [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    UHCC
    M&V
    Proposed       [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    Discount
    M&V
    Proposed       [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    UHCC
    WellPoint
    Med.
    [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    Proposed
    Discount
    WellPoint
    Med.
    [Redacted]        [Redacted]        [Redacted]     [Redacted]       [Redacted]
    Proposed
    UHCC
    In addition to the proposed Guaranteed Network Provider discounts depicted in
    the table above, offerors also proposed a fixed fee for the underwritten healthcare costs,
    contained in CLINs X002. The following table captures the offerors’ proposed fixed fee as
    compared to the ICE fixed fee:
    15
    EAST Region     Option 1        Option 2          Option 3        Option 4         Option 5
    ICE Fixed Fee   $100,583,170     $105,762,695     $111,557,489     $117,394,756     $123,486,733
    Health Net
    [Redacted]      [Redacted]        [Redacted]      [Redacted]       [Redacted]
    Fixed Fee
    Humana Fixed
    [Redacted]      [Redacted]        [Redacted]      [Redacted]       [Redacted]
    Fee
    M&V Fixed Fee   [Redacted]      [Redacted]        [Redacted]      [Redacted]       [Redacted]
    WellPoint
    [Redacted]      [Redacted]        [Redacted]      [Redacted]       [Redacted]
    Fixed Fee
    Similarly, with respect to CLINs X003 for PMPM administrative costs, the following
    chart shows the average PMPM unit prices proposed by each offeror in comparison to
    the ICE for the PMPM prices:
    East            ICE             Health Net      Humana           M&V              WellPoint
    Region                                                                            Medical
    PMPM            $8.81           [Redacted]      [Redacted]       [Redacted]       [Redacted]
    Average
    Unit Price
    PMPM            $3.14 billion   [Redacted]      [Redacted]       [Redacted]       [Redacted]
    Total
    The Source Selection Evaluation Board reviewed the proposals and drafted a
    summary of its evaluations for the Source Selection Advisory Council and the Source
    Selection Authority. The Source Selection Evaluation Board did not conduct a
    comparative analysis or propose a source selection recommendation. The following table
    depicts the offerors’ individual ratings for the factors and subfactors set forth in the
    solicitation, as assigned by the Source Selection Evaluation Board:
    16
    Technical Ratings‐Technical/Management Risk Rating
    Total
    Offeror                                                                                                              Past
    Evalu‐
    Perfor‐
    ated
    Subfactor      Subfactor      Subfactor      Subfactor      Subfactor     Subfactor     Subfactor      mance
    1              2              3              4              5             6             7                        Price
    Network        Referral       Medical        Customer         Claims       Program      Transition
    Manage‐        Manage‐        Manage‐         Service       Processing    Planning &     Manage‐
    ment           ment           ment                                         Control       ment
    HealthNet                                                                                                          Satisfactory   $40,170,
    Federal      Outstanding    Outstanding     Good          Outstanding      Good        Acceptable    Acceptable   Confidence     839,651
    Services
    Low            Low            Low            Low            Low           Low           Low
    Humana                                                                                                            Substantial
    Military      Good          Outstanding     Good          Outstanding      Good         Good         Acceptable                  $40,517,
    Confidence
    Healthcare                                                                                                                        947,263
    Services
    Low            Low            Low            Low            Low           Low           Low
    M&V                                                                                                               Limited       $43,073,
    Outstanding     Good          Outstanding     Good          Acceptable     Good         Acceptable                  480,195
    Confidence
    Low            Low            Low            Low            Low           Low           Low
    WellPoint                                                                                                          Satisfactory   $40,712,
    Military       Good          Outstanding     Good          Outstanding    Acceptable    Acceptable    Acceptable   Confidence     000,000
    Care
    Low            Low            Low            Low            Low           Low              Mod
    After the Source Selection Evaluation Board completed its report, the Source
    Selection Advisory Council reviewed the documentation of the Source Selection
    Evaluation Board’s evaluation to ensure that the Source Selection Evaluation Board had
    conducted a comprehensive review and evaluation of proposals in accordance with the
    evaluation criteria in Section M of the solicitation. The Source Selection Advisory Council
    determined that the Source Selection Evaluation Board complied with the evaluation
    criteria, and also conducted an analysis and comparison of the offerors’ final proposals in
    order to make an award recommendation to the Source Selection Authority.
    After reviewing the Source Selection Evaluation Board’s technical, past
    performance, and price/cost evaluation consensus reports, the Source Selection
    Evaluation Board Chairperson’s report, and the Source Selection Advisory Council’s
    report and recommendation, the Source Selection Authority conducted an independent
    comparative assessment and trade-off analysis of the offerors’ final proposals to reach
    an independent award decision for each region.
    The Source Selection Authority’s final evaluation resulted in the following findings
    concerning the East Region:
    17
    The Source Selection Authority found that, with regard to the East Region contract,
    “Humana is the best value offeror.” The Source Selection Authority’s decision document
    explained that “Humana has the superior proposal in the non-price Factors.” In finding
    that Humana’s proposal represented the best value to DHA, the Source Selection
    Authority explained:
    Under Factor 1, Technical/Management, all offerors submitted strong
    proposals, and, as explained above, the degree of difference among the
    offerors was not dramatic. I determined that M&V ranked first in this Factor,
    with a slight advantage over both Humana and Health Net. I determine that
    Humana is ranked second for Factor 1, Health Net is ranked third, and WMC
    [Wellpoint] is ranked fourth.
    Under Factor 2, Past Performance, Humana has the clear advantage. For
    reasons explained above, the degree of distinction between Humana (rated
    Substantial Confidence) and M&V, WMC and Health Net (rated Satisfactory
    Confidence) was substantial. WMC is rated second in Factor 2. Between
    M&V and Health Net, I concluded that both were essentially equal in this
    Factor.
    Under Factor 3, Price, Health Net had the lowest Total Evaluated Price
    (TEP) ($40,170,839,651), followed by Humana ($40,517,947,263), followed
    by WMC ($40,712,000,000).          M&V proposed the highest TEP
    ($43,073,480,195).
    Under Factor 4, all offerors were rated acceptable.
    In making my decision I considered that, in accordance with RFP Section
    M.4, Factor 1, Technical/Management and Factor 2, Past Performance, are
    equal in importance, and individually, are more important than Factor 3,
    18
    Price/Cost. Further, when combined, Factors 1 and 2 are significantly more
    important than Factor 3, Price/Cost.
    As to price, the Source Selection Authority found that the “P/CT Report documents
    a thorough analysis, including consideration of an Independent Cost Estimate (ICE) that
    fails to produce any findings that the prices proposed by the offerors are unreasonable.”
    The Source Selection Authority concurred with the contracting officer’s determination that
    the prices proposed by the offerors were reasonable and that no offeror’s proposal
    included unbalanced pricing.
    In the source selection decision document for the East Region contract, the Source
    Selection Authority recognized that “M&V did have a slightly better Factor 1 proposal than
    Humana,” however, Factors 1 and 2 were equal in importance and Humana has a
    “significant Factor 2 advantage” that outweighed “M&V’s slight advantage in Factor 1.”
    Moreover, because Humana’s proposal was determined to be the superior proposal in
    the non-price factors and Humana’s total evaluated price was lower than M&V’s total
    evaluated price, the Source Selection Authority concluded that a trade-off analysis was
    not necessary. The Source Selection Authority also concluded that a trade-off analysis
    was not required between Humana and WellPoint because Humana’s proposal was
    superior for Factors 1 and 2 and Humana’s total evaluated price was lower than
    Wellpoint’s total evaluated price. Because Health Net’s total evaluated price was lower
    than Humana’s total evaluated price, the Source Selection Authority conducted a trade-
    off analysis and determined that “Humana’s slight advantage in Factor 1 and significant
    advantage in Factor 2 significantly outweigh” the difference in price between Humana and
    Health Net’s proposals. Based on the Source Selection Authority’s analysis, as reflected
    in the source selection document, the Source Selection Authority ranked the offerors for
    the East Region “as Humana having the best value proposal, followed by Health Net, then
    [Wellpoint], and then M&V.”
    West Region Evaluation
    The following table represents the offerors’ final proposed prices for the West
    Region contract in comparison to the ICE:
    WEST Region:                  Total Evaluated Price         Percent Difference from
    ICE
    Health Net                    $17,723,452,440.00            -11.0%
    Humana                        $17,882,351,687.00            -10.2%
    M&V                           $18,803,253,647.00            -5.5%
    ICE:                          $19,902,918,734.00
    As explained above, the total evaluated prices were affected in large part by the
    offerors’ proposed Guaranteed Network Provider discounts (CLINs X001), as well as the
    proposed PMPM administrative costs (CLINs X003). Regarding CLINs X001 for
    underwritten healthcare costs, the following chart shows the Guaranteed Network
    Provider discounts proposed by each offeror and the projected impact on the total
    19
    underwritten healthcare costs for each option period:
    WEST Region     Option 1         Option 2          Option 3         Option 4         Option 5
    Government-
    provided
    estimate
    $2,853,552,478   $2,998,491,374    $3,162,829,032   $3,328,554,502   $3,502,206,444
    underwritten
    healthcare
    costs (UHCC)
    Health    Net
    Proposed        [Redacted]       [Redacted]        [Redacted]       [Redacted]       [Redacted]
    Discount
    Health    Net
    proposed
    [Redacted]       [Redacted]        [Redacted]       [Redacted]       [Redacted]
    UHCC
    Humana
    Proposed        [Redacted]       [Redacted]        [Redacted]       [Redacted]       [Redacted]
    Discount
    Humana
    Proposed        [Redacted]       [Redacted]        [Redacted]       [Redacted]       [Redacted]
    UHCC
    M&V
    Proposed        [Redacted]       [Redacted]        [Redacted]       [Redacted]       [Redacted]
    Discount
    M&V
    Proposed        [Redacted]       [Redacted]        [Redacted]       [Redacted]       [Redacted]
    UHCC
    Offerors also proposed a fixed fee for the underwritten healthcare costs, contained
    in CLINs X002. The following table captures the offerors’ proposed fixed fee as compared
    to the ICE fixed fee:
    20
    WEST Region     Option 1       Option 2           Option 3        Option 4      Option 5
    ICE Fixed Fee   $42,803,287    $44,977,371        $47,442,435     $49,928,318   $52,533,097
    Health Net
    [Redacted]     [Redacted]         [Redacted]      [Redacted]    [Redacted]
    Fixed Fee
    Humana Fixed
    [Redacted]     [Redacted]         [Redacted]      [Redacted]    [Redacted]
    Fee
    M&V Fixed Fee   [Redacted]     [Redacted]         [Redacted]      [Redacted]    [Redacted]
    Similarly, with respect to CLINs X003 for PMPM administrative costs, the following
    chart shows the average PMPM unit prices proposed by each offeror in comparison to
    the ICE for the PMPM prices:
    West            ICE           Health Net      Humana            M&V
    Region
    PMPM            $9.89         [Redacted]      [Redacted]        [Redacted]
    Average
    Unit Price
    PMPM            $1.72 billion [Redacted]      [Redacted]        [Redacted]
    Total
    As with the East Region proposals, the Source Selection Evaluation Board
    reviewed the West Region proposals and drafted a summary of its evaluations for the
    Source Selection Advisory Council and the Source Selection Authority. The Source
    Selection Evaluation Board did not conduct a comparative analysis or propose a source
    selection recommendation. The following table depicts the offerors’ individual ratings for
    the factors and subfactors set forth in the solicitation, as assigned by the Source Selection
    Evaluation Board:
    21
    Technical Ratings‐Technical/Management Risk Rating
    Total
    Offeror                                                                                                              Past
    Evalu‐
    Perfor‐
    Subfactor      Subfactor      Subfactor      Subfactor      Subfactor     Subfactor     Subfactor                     ated
    mance
    1              2              3              4              5             6             7                        Price
    Network        Referral       Medical        Customer         Claims       Program      Transition
    Manage‐        Manage‐        Manage‐         Service       Processing    Planning &     Manage‐
    ment           ment           ment                                         Control       ment
    HealthNet                                                                                                          Satisfactory   $17,723,
    Federal      Outstanding    Outstanding     Good          Outstanding      Good        Acceptable    Acceptable   Confidence     452,440
    Services
    Low            Low            Low            Low            Low           Low           Low
    Humana                                                                                                            Substantial
    Military      Good          Outstanding     Purple        Outstanding      Good         Good         Acceptable                  $17,882,
    Confidence
    Healthcare                                                                                                                        351,687
    Services
    Low            Low            Low            Low            Low           Low           Low
    United                                                                                                           Satisfactory   $18,803,
    HealthCare    Outstanding     Good          Outstanding     Good          Acceptable     Good         Acceptable                  253,647
    Confidence
    Military
    and
    Veterans
    Low            Low            Low            Low            Low           Low           Low
    The Source Selection Advisory Council reviewed the Source Selection Evaluation
    Board’s documentation and evaluation of the proposals to ensure that the Source
    Selection Evaluation Board had complied with the evaluation criteria in the solicitation.
    The Source Selection Advisory Council also analyzed and compared the proposals and
    made an award recommendation to the Source Selection Authority.
    After reviewing the Source Selection Evaluation Board’s technical, past
    performance, and price/cost evaluation consensus reports, the Source Selection
    Evaluation Board Chairperson’s report, and the Source Selection Advisory Council’s
    report and recommendation, the Source Selection Authority conducted an independent
    comparative assessment and trade-off analysis of the offerors’ final proposals to reach
    an independent award decision.
    22
    The Source Selection Authority’s final evaluation resulted in the following findings
    concerning the West Region:
    Technical Ratings-Technical Management Risk Ratings                                             Past            Total
    Offeror                                                                                                         Perform-        Evaluated
    SF1     SF2       SF3     SF4     SF5     SF6       SF7                                         ance            Price
    Network       Referral      Medical       Customer       Claims      Program      Transition
    Management    Management    Management      Service     Processing   Planning &   Management
    Control
    Health Net                                                                                                      Satisfactory   $17,723,452,440
    Outstanding   Outstanding     Good        Outstanding     Good       Acceptable   Acceptable    Confidence
    Federal
    Services
    Low           Low           Low           Low           Low         Low           Low
    Humana                                                                                                        Substantial    $17,882,351,687
    Good        Outstanding   Outstanding   Outstanding     Good         Good       Acceptable    Confidence
    Government
    Business Inc.
    Low           Low           Low           Low           Low         Low           Low
    United                                                                                                       Satisfactory   $18,803,253,647
    Outstanding     Good        Outstanding     Good        Acceptable     Good       Acceptable    Confidence
    Health
    Military
    and
    Veterans         Low           Low           Low           Low           Low         Low           Low
    The Source Selection Authority determined that Humana’s proposal represented the best
    overall value to DHA, however, the Source Selection Authority explained that, if Humana
    could not be awarded the contract because of the restrictions in the solicitation, then
    Health Net’s proposal represented the next best overall value to DHA. In conducting the
    best value analysis, the Source Selection Authority explained:
    Under Factor 1, Technical/Management, all offerors submitted strong
    proposals, and, as explained above, the degree of difference among the
    offerors was not dramatic. I determined that M&V ranked first in this Factor,
    with a slight advantage over both Humana and Health Net. I further
    determined that Humana was ranked second in this Factor, followed by
    Health Net.
    Under Factor 2, Past Performance, [sic] Humana has the clear advantage.
    For reasons explained above, the degree of distinction between Humana
    (rated Substantial Confidence) and M&V and Health Net (rated Satisfactory
    Confidence) was substantial. Between M&V and Health Net, I concluded
    that both were essentially equal in this Factor.
    Under Factor 3, Price, Health Net had the lowest Total Evaluated Price
    (TEP) ($17,723,452,440), followed by Humana ($17,882,351,687). M&V
    proposed the highest TEP ($18,803,253,647).
    Under Factor 4, all offerors were rated acceptable.
    In making my decision I considered that, in accordance with the RFP, Factor
    1, Technical/Management and Factor 2, Past Performance, are equal in
    23
    importance, and individually, are more important than Factor 3, Price/Cost.
    The Source Selection Authority also found that the “P/CT Report documents a
    thorough analysis, including consideration of the Independent Cost Estimate (ICE) that
    fails to produce any findings that the prices proposed by the offerors are unreasonable.”
    Accordingly, the Source Selection Authority concluded that the offerors’ proposed prices
    were reasonable and did not include unbalanced pricing.
    The Source Selection Authority concluded that Humana was the best value offeror
    because it “clearly demonstrated significantly better Past Performance” and proposed a
    price $920,901,960.00 less than M&V’s proposed price. Thus, even though M&V had a
    “slightly better Factor 1 proposal than Humana,” Factors 1 and 2 were equal in importance
    and Humana’s significant past performance advantage outweighed M&V’s slight
    advantage in Factor 1.
    After finding that Humana was the best value offeror for the West Region contract,
    the Source Selection Authority conducted a trade-off analysis between M&V and Health
    Net:
    Between M&V and Health Net, M&V has a better Technical Proposal for
    Factor 1. As noted above, for Factor 2, both offerors were assessed the
    same Past Performance rating of Satisfactory Confidence and after
    consideration of all reports and information I determined that I cannot
    distinguish a meaningful difference between the past performance of M&V
    and Health Net. It is clear that M&V had documented difficulties in
    performance during the [Redacted] contract transition and OP1, but has
    improved performance in OP2 of the [Redacted] contract and is now
    performing satisfactorily. It is equally clear that there has been some decline
    in Health Net’s performance over the span of their [Redacted] contract,
    however their performance remains satisfactory. They have also
    encountered difficulties in their [Redacted] contract, which is similar in
    scope, magnitude of effort, and complexities to this solicitation. Factors 1
    and 2 are of equal importance in this evaluation. Therefore I find that the
    advantages in M&V’s proposal for Factor 1, and lack of a meaningful
    difference between their past performance ratings give an advantage to
    M&V over Health Net in the non-price evaluation factors. However, even
    though Factors 1 and 2 are each more important than Factor 3, Price, I
    further find nothing in M&V’s technical proposal which warrants the
    significantly higher price of M&V’s offer at $1,079,801,207 over Health Net’s
    offer.
    The Source Selection Authority determined that, although M&V had an advantage
    over Health Net with regard to the non-price factors, M&V’s technical advantage did not
    warrant the additional $1,079,801,207.00 in price. Indeed, the Source Selection Authority
    found that “nothing” in M&V’s proposal “warrants the significantly higher price” of its offer.
    Accordingly, the Source Selection Authority ranked the offerors as Humana having the
    best value proposal, followed by Health Net, and then M&V.
    24
    The Source Selection Authority decision documents demonstrate that Humana’s
    proposals for the East and West Region contracts offered the best overall value to the
    government in the East and West Regions. Due to the restrictions in the solicitation
    limiting an offeror to only one contract award, however, DHA awarded the East Region
    contract to Humana and the West Region contract to Health Net, as its proposal was
    found to represent the next-best value to the government. DHA notified the offerors of its
    award decisions on July 21, 2016.
    Procedural History
    M&V filed a bid protest at the GAO on August 1, 2016, after receiving a debriefing
    by DHA. WellPoint and Health Net also filed protests at the GAO that challenged DHA’s
    award of the East Region contract to Humana. On October 19, 2016, the GAO held a
    hearing to address the bid protest. On November 9, 2016, the GAO issued its decision
    denying the protests of M&V, Health Net, and WellPoint. In its decision, the GAO agreed
    with M&V that the agency was required to perform a price realism analysis under the
    terms of the solicitation, specifically Section M.2.2. The GAO explained that this section
    of the solicitation “warned offerors that the agency ‘may reject any proposal that is
    evaluated to be unrealistic in terms of program commitments, contract terms and
    conditions such that the proposal is deemed to reflect an inherent lack of competence or
    failure to comprehend the complexity and risks of the program.’” UnitedHealth Military &
    Veterans Servs., LLC, et al., B-411837.2 et al., 
    2016 WL 6821970
    , at *4. Citing previous
    GAO decisions, and without further discussion of the solicitation language, the GAO found
    that when “a solicitation puts offerors on notice that a procuring agency may reject
    proposals that are evaluated as being unrealistic, the agency’s rejection of proposals is
    discretionary, but the realism evaluation is mandatory.” Id. at *5. The GAO concluded:
    [S]ection M.2.2 provided that the agency would consider whether a proposal
    reflected a realistic understanding of the risks and complexities associated
    with program commitments and the contract's terms and conditions. Based
    on our review of the entire record, including the SSA's testimony that
    explained the extensive contemporaneous documentation supporting his
    conclusions, we conclude that the agency complied with the solicitation
    provisions regarding a realism assessment.
    Id. at *6. The GAO denied the other protest grounds.
    On November 17, 2016, M&V filed the above-captioned post-award bid protest in
    this court. The complaint, when filed, included two counts, but only Count I remains for
    this court to consider. Protestor withdrew Count II on January 27, 2017.14
    14Count II of the complaint had alleged that procurement law and regulations require
    offerors to submit proposals that comply with solicitation instructions and requirements,
    and that Humana and Health Net submitted proposals that explicitly deviated from the
    solicitation’s requirements. In a subsequent filing, protestor stated: “After reviewing the
    facts presented by Humana and Health Net in their briefs, UnitedHealth withdraws Count
    25
    Count I of the complaint, which is the only remaining count in the complaint, alleges
    that the solicitation contained a requirement that the agency assess the realism of
    program commitments and contract terms and conditions, but that the contemporaneous
    record is devoid of any evidence that the agency assessed the realism of the offerors’
    PMPM CLINs or Guaranteed Network Provider discounts.
    M&V asks this court to declare that DHA’s decision to award the “T-2017” contracts
    to Humana and Health Net lacked a rational basis and represented a clear and prejudicial
    violation of procurement regulations, to permanently enjoin DHA from proceeding with the
    contracts awarded under the solicitation to Humana and Health Net, and to order DHA to
    re-evaluate the proposals in accordance with the terms of the solicitation in order to make
    a new best value trade-off decision. Protestor argues that it is entitled to permanent
    injunctive relief because it can demonstrate success on the merits, it will be irreparably
    harmed by the loss of the opportunity to compete fairly for the contracts if injunctive relief
    is not granted, and public interest weighs in favor of injunctive relief. In response to the
    complaint, Humana and Health Net moved to intervene. After hearing from the parties,
    the court granted Humana and Health Net’s motions to intervene. All parties have cross-
    moved for judgment on the administrative record. The parties do not dispute that this court
    has subject matter jurisdiction to consider the above-captioned bid protest and that M&V
    has standing to pursue this bid protest.
    DISCUSSION
    Rule 52.1(c) of the Rules of the United States Court of Federal Claims (RCFC)
    (2016) governs motions for judgment on the administrative record. The court’s inquiry is
    directed to “‘whether, given all the disputed and undisputed facts, a party has met its
    burden of proof based on the evidence in the record.’” Mgmt. & Training Corp. v. United
    States, 
    115 Fed. Cl. 26
    , 40 (2014) (quoting A & D Fire Prot., Inc. v. United States, 
    72 Fed. Cl. 126
    , 131 (2006) (citing Bannum, Inc. v. United States, 
    404 F.3d 1346
    , 1356–57 (Fed.
    Cir. 2005))); see also Strategic Bus. Sols., Inc. v. United States, 
    129 Fed. Cl. 621
    , 627
    (2016); Rotech Healthcare Inc. v. United States, 
    118 Fed. Cl. 408
    , 413 (2014); Eco Tour
    Adventures, Inc. v. United States, 
    114 Fed. Cl. 6
    , 21 (2013); DMS All-Star Joint Venture
    v. United States, 
    90 Fed. Cl. 653
    , 661 (2010). Pursuant to RCFC 52.1, in a bid protest,
    the court reviews the agency’s procurement decision to determine whether it is supported
    by the administrative record. See CW Gov’t Travel, Inc. v. United States, 
    110 Fed. Cl. 462
    , 481 (2013).
    The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,
    §§ 12(a), 12(b), 
    110 Stat. 3870
    , 3874 (1996) (codified at 
    28 U.S.C. § 1491
    (b)(1)–(4)
    (2012)), amended the Tucker Act to establish a statutory basis for bid protests in the
    United States Court of Federal Claims. See Impresa Construzioni Geom. Domenico
    Garufi v. United States, 
    238 F.3d 1324
    , 1330–32 (Fed. Cir. 2001); see also Sys.
    II of its Complaint, which alleged that Humana’s and Health Net’s proposals violated the
    Solicitation’s stated requirements regarding network utilization.” As a result of protestor’s
    withdrawal, the court does not consider Count II of the complaint.
    26
    Application & Techs., Inc. v. United States, 
    691 F.3d 1374
    , 1380 (Fed. Cir. 2012)
    (explaining that the Tucker Act expressly waives sovereign immunity for claims against
    the United States in bid protests). The statute provides that protests of agency
    procurement decisions are to be reviewed under Administrative Procedure Act (APA)
    standards, making applicable the standards outlined in Scanwell Labs., Inc. v. Shaffer,
    
    424 F.2d 859
     (D.C. Cir. 1970), and the line of cases following that decision. See, e.g., Per
    Aarsleff A/S v. United States, 
    829 F.3d 1303
    , 1309 (Fed. Cir. 2016) (quoting NVT Techs.,
    Inc. v. United States, 
    370 F.3d 1153
    , 1159 (Fed. Cir. 2004)) (“Protests of agency
    procurement decisions are reviewed under the standards set forth in the Administrative
    Procedure Act (‘APA’), see 
    28 U.S.C. § 1491
    (b)(4) (citing 
    5 U.S.C. § 706
    ), ‘by which an
    agency's decision is to be set aside only if it is arbitrary, capricious, an abuse of discretion,
    or otherwise not in accordance with law[.]’”); Impresa Construzioni Geom. Domenico
    Garufi v. United States, 
    238 F.3d at 1332
    ); Res. Conservation Grp., LLC v. United States,
    
    597 F.3d 1238
    , 1242 (Fed. Cir. 2010) (“Following passage of the APA in 1946, the District
    of Columbia Circuit in Scanwell Labs., Inc. v. Shaffer, 
    424 F.2d 859
     (D.C. Cir. 1970), held
    that challenges to awards of government contracts were reviewable in federal district
    courts pursuant to the judicial review provisions of the APA.”); Galen Med. Assocs., Inc.
    v. United States, 
    369 F.3d 1324
    , 1329 (Fed. Cir. 2004) (citing Scanwell Labs., Inc. v.
    Shaffer, 
    424 F.2d at 864, 868
    , for its “reasoning that suits challenging the award process
    are in the public interest and disappointed bidders are the parties with an incentive to
    enforce the law”); Banknote Corp. of Am., Inc. v. United States, 
    365 F.3d 1345
    , 1351
    (Fed. Cir. 2004) (“Under the APA standard as applied in the Scanwell line of cases, and
    now in ADRA cases, ‘a bid award may be set aside if either (1) the procurement official’s
    decision lacked a rational basis; or (2) the procurement procedure involved a violation of
    regulation or procedure.’” (quoting Impresa Construzioni Geom. Domenico Garufi v.
    United States, 
    238 F.3d at 1332
    )); Info. Tech. & Applications Corp. v. United States, 
    316 F.3d 1312
    , 1319 (Fed. Cir. 2003).
    When discussing the appropriate standard of review for bid protest cases, the
    United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and
    (2)(D) of 
    5 U.S.C. § 706
    , see Impresa Construzioni Geom. Domenico Garufi v. United
    States, 
    238 F.3d at
    1332 n.5, but focused its attention primarily on subsection (2)(A). See
    Croman Corp. v. United States, 
    724 F.3d 1357
    , 1363 (Fed. Cir. 2013) (“‘[T]he proper
    standard to be applied [to the merits of] bid protest cases is provided by 
    5 U.S.C. § 706
    (2)(A) [(2006)]: a reviewing court shall set aside the agency action if it is “arbitrary,
    capricious, an abuse of discretion, or otherwise not in accordance with law.”’” (quoting
    Banknote Corp. of Am. v. United States, 
    365 F.3d at
    1350–51 (citing Advanced Data
    Concepts, Inc. v. United States, 
    216 F.3d 1054
    , 1057–58 (Fed. Cir.), reh’g denied (Fed.
    Cir. 2000)), aff’d, 
    365 F.3d 1345
     (Fed. Cir. 2004)))), reh’g and reh’g en banc denied (Fed.
    Cir. 2013) (alterations in original). The statute says that agency procurement actions
    should be set aside when they are “arbitrary, capricious, an abuse of discretion, or
    otherwise not in accordance with law,” or “without observance of procedure required by
    law.” 
    5 U.S.C. § 706
    (2)(A), (D) (2012);15 see also Tinton Falls Lodging Realty, LLC v.
    15 The   language of 
    5 U.S.C. § 706
     provides in full:
    To the extent necessary to decision and when presented, the reviewing
    27
    United States, 
    800 F.3d 1353
    , 1358 (Fed. Cir. 2015); Orion Tech., Inc. v. United States,
    
    704 F.3d 1344
    , 1347 (Fed. Cir. 2013); COMINT Sys. Corp. v. United States, 
    700 F.3d 1377
    , 1381 (Fed. Cir. 2012) (“We evaluate agency actions according to the standards set
    forth in the Administrative Procedure Act; namely, for whether they are ‘arbitrary,
    capricious, an abuse of discretion, or otherwise not in accordance with law.’” (quoting 
    5 U.S.C. § 706
    (2)(A); Bannum, Inc. v. United States, 
    404 F.3d at 1351
    )); Savantage Fin.
    Servs. Inc., v. United States, 
    595 F.3d 1282
    , 1285–86 (Fed. Cir. 2010); Weeks Marine,
    Inc. v. United States, 
    575 F.3d 1352
    , 1358 (Fed. Cir. 2009); Axiom Res. Mgmt., Inc. v.
    United States, 
    564 F.3d 1374
    , 1381 (Fed. Cir. 2009) (noting arbitrary and capricious
    standard set forth in 
    5 U.S.C. § 706
    (2)(A), and reaffirming the analysis of Impresa
    Construzioni Geom. Domenico Garufi v. United States, 
    238 F.3d at 1332
    ); Blue & Gold
    Fleet, L.P. v. United States, 
    492 F.3d 1308
    , 1312 (Fed. Cir. 2007) (“‘[T]he inquiry is
    whether the [government]’s procurement decision was “arbitrary, capricious, an abuse of
    discretion, or otherwise not in accordance with law.”’” (quoting Bannum, Inc. v. United
    court shall decide all relevant questions of law, interpret constitutional and
    statutory provisions, and determine the meaning or applicability of the terms
    of an agency action. The reviewing court shall—
    (1) compel agency action unlawfully withheld or unreasonably delayed;
    and
    (2) hold unlawful and set aside agency action, findings, and conclusions
    found to be—
    (A) arbitrary, capricious, an abuse of discretion, or otherwise not in
    accordance with law;
    (B) contrary to constitutional right, power, privilege, or immunity;
    (C) in excess of statutory jurisdiction, authority, or limitations, or short
    of statutory right;
    (D) without observance of procedure required by law;
    (E) unsupported by substantial evidence in a case subject to sections
    556 and 557 of this title or otherwise reviewed on the record of
    an agency hearing provided by statute; or
    (F) unwarranted by the facts to the extent that the facts are subject
    to trial de novo by the reviewing court.
    In making the foregoing determinations, the court shall review the whole
    record or those parts of it cited by a party, and due account shall be taken
    of the rule of prejudicial error.
    
    5 U.S.C. § 706
    .
    28
    States, 
    404 F.3d at 1351
     (quoting 
    5 U.S.C. § 706
    (2)(A) (2000))); NVT Techs., Inc. v.
    United States, 
    370 F.3d at 1159
     (“Bid protest actions are subject to the standard of review
    established under section 706 of title 5 of the Administrative Procedure Act (‘APA’), 
    28 U.S.C. § 1491
    (b)(4) (2000), by which an agency’s decision is to be set aside only if it is
    ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’ 
    5 U.S.C. § 706
    (2)(A) (2000).”) (internal citations omitted); Info. Tech. & Applications Corp.
    v. United States, 
    316 F.3d at 1319
     (“Consequently, our inquiry is whether the Air Force’s
    procurement decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not
    in accordance with law.’ 
    5 U.S.C. § 706
    (2)(A) (2000).”); Eco Tour Adventures, Inc. v.
    United States, 114 Fed. Cl. at 22; Contracting, Consulting, Eng’g LLC v. United States,
    
    104 Fed. Cl. 334
    , 340 (2012). “In a bid protest case, the agency’s award must be upheld
    unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
    with law.’” Turner Constr. Co. v. United States, 
    645 F.3d 1377
    , 1383 (Fed. Cir.) (quoting
    PAI Corp. v. United States, 
    614 F.3d 1347
    , 1351 (Fed. Cir. 2010)), reh’g and reh’g en
    banc denied (Fed. Cir. 2011); see also Tinton Falls Lodging Realty, LLC v. United States,
    800 F.3d at 1358 (“In applying this [arbitrary and capricious] standard to bid protests, our
    task is to determine whether the procurement official's decision lacked a rational basis or
    the procurement procedure involved a violation of a regulation or procedure.”) (citing
    Savantage Fin. Servs., Inc. v. United States, 595 F.3d at 1285–86); Glenn Def. Marine
    (ASIA), PTE Ltd. v. United States, 
    720 F.3d 901
    , 907 (Fed. Cir.), reh’g en banc denied
    (Fed. Cir. 2013); McVey Co., Inc. v. United States, 
    111 Fed. Cl. 387
    , 402 (2013) (“The
    first step is to demonstrate error, that is, to show that the agency acted in an arbitrary and
    capricious manner, without a rational basis or contrary to law.”); PlanetSpace, Inc. v.
    United States, 
    92 Fed. Cl. 520
    , 531–32 (2010) (“Stated another way, a plaintiff must show
    that the agency’s decision either lacked a rational basis or was contrary to law.” (citing
    Weeks Marine, Inc. v. United States, 575 F.3d at 1358)).
    The United States Supreme Court has identified sample grounds which can
    constitute arbitrary or capricious agency action:
    [W]e will not vacate an agency’s decision unless it “has relied on factors
    which Congress has not intended it to consider, entirely failed to consider
    an important aspect of the problem, offered an explanation for its decision
    that runs counter to the evidence before the agency, or is so implausible
    that it could not be ascribed to a difference in view or the product of agency
    expertise.”
    Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 
    551 U.S. 644
    , 658 (2007) (quoting
    Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 
    463 U.S. 29
    , 43 (1983)); see
    also Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d at 1358; F.C.C. v. Fox
    Television Stations, Inc., 
    556 U.S. 502
    , 552 (2009); Ala. Aircraft Indus., Inc.-Birmingham
    v. United States, 
    586 F.3d 1372
    , 1375 (Fed. Cir. 2009), reh’g and reh’g en banc denied
    (Fed. Cir. 2010); In re Sang Su Lee, 
    277 F.3d 1338
    , 1342 (Fed. Cir. 2002) (“[T]he agency
    tribunal must present a full and reasoned explanation of its decision. . . . The reviewing
    court is thus enabled to perform meaningful review . . . .”); Textron, Inc. v. United States,
    
    74 Fed. Cl. 277
    , 285–86 (2006), appeal dismissed sub nom. Textron, Inc. v. Ocean
    Technical Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007). The United States Supreme
    29
    Court also has cautioned, however, that “courts are not free to impose upon agencies
    specific procedural requirements that have no basis in the APA.” Pension Benefit Guar.
    Corp. v. LTV Corp., 
    496 U.S. 633
    , 654 (1990).
    Under an arbitrary or capricious standard, the reviewing court should not substitute
    its judgment for that of the agency, but should review the basis for the agency decision to
    determine if it was legally permissible, reasonable, and supported by the facts. See Motor
    Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 
    463 U.S. at 43
     (“The scope of
    review under the ‘arbitrary and capricious’ standard is narrow and a court is not to
    substitute its judgment for that of the agency.”); see also Turner Constr. Co., Inc. v. United
    States, 
    645 F.3d at 1383
    ; R & W Flammann GmbH v. United States, 
    339 F.3d 1320
    , 1322
    (Fed. Cir. 2003) (citing Ray v. Lehman, 
    55 F.3d 606
    , 608 (Fed. Cir.), cert. denied, 
    516 U.S. 916
     (1995)). “‘“If the court finds a reasonable basis for the agency’s action, the court
    should stay its hand even though it might, as an original proposition, have reached a
    different conclusion as to the proper administration and application of the procurement
    regulations.”’” Weeks Marine, Inc. v. United States, 575 F.3d at 1371 (quoting Honeywell,
    Inc. v. United States, 
    870 F.2d 644
    , 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v.
    Seamans, 
    455 F.2d 1289
    , 1301 (D.C. Cir. 1971))); Jordan Pond Co., LLC v. United
    States, 
    115 Fed. Cl. 623
    , 631 (2014); Davis Boat Works, Inc. v. United States, 
    111 Fed. Cl. 342
    , 349 (2013); Norsat Int’l [America], Inc. v. United States, 
    111 Fed. Cl. 483
    , 493
    (2013); HP Enter. Servs., LLC v. United States, 
    104 Fed. Cl. 230
    , 238 (2012); Vanguard
    Recovery Assistance v. United States, 
    101 Fed. Cl. 765
    , 780 (2011).
    Stated otherwise by the United States Supreme Court:
    Section 706(2)(A) requires a finding that the actual choice made was not
    “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
    with law.” To make this finding the court must consider whether the decision
    was based on a consideration of the relevant factors and whether there has
    been a clear error of judgment. Although this inquiry into the facts is to be
    searching and careful, the ultimate standard of review is a narrow one. The
    court is not empowered to substitute its judgment for that of the agency.
    Citizens to Pres. Overton Park, Inc. v. Volpe, 
    401 U.S. 402
    , 416 (1971), abrogated on
    other grounds by Califano v. Sanders, 
    430 U.S. 99
     (1977) (internal citations omitted); see
    also U.S. Postal Serv. v. Gregory, 
    534 U.S. 1
    , 6–7 (2001); Bowman Transp., Inc. v.
    Arkansas-Best Freight Sys., Inc., 
    419 U.S. 281
    , 285 (1974), reh’g denied, 
    420 U.S. 956
    (1975); Co-Steel Raritan, Inc. v. Int’l Trade Comm’n, 
    357 F.3d 1294
    , 1309 (Fed. Cir. 2004)
    (In discussing the “arbitrary, capricious, and abuse of discretion, or otherwise not in
    accordance with the law” standard, the Federal Circuit stated: “the ultimate standard of
    review is a narrow one. The court is not empowered to substitute its judgment for that of
    the agency.”); In re Sang Su Lee, 
    277 F.3d at 1342
    ; Advanced Data Concepts, Inc. v.
    United States, 
    216 F.3d at 1058
     (“The arbitrary and capricious standard applicable here
    is highly deferential. This standard requires a reviewing court to sustain an agency action
    evincing rational reasoning and consideration of relevant factors.” (citing Bowman
    Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles &
    Space Co. v. Bentsen, 
    4 F.3d 955
    , 959 (Fed. Cir. 1993); BCPeabody Constr. Servs., Inc.
    30
    v. United States, 
    112 Fed. Cl. 502
    , 508 (2013) (“The court ‘is not empowered to substitute
    its judgment for that of the agency,’ and it must uphold an agency’s decision against a
    challenge if the ‘contracting agency provided a coherent and reasonable explanation of
    its exercise of discretion.’” (quoting Keeton Corrs., Inc. v. United States, 
    59 Fed. Cl. 753
    ,
    755, recons. denied, 
    60 Fed. Cl. 251
     (2004), and Axiom Res. Mgmt., Inc. v. United States,
    
    564 F.3d at 1381
    )), appeal withdrawn, 559 F. App’x 1033 (Fed. Cir. 2014) (internal
    citations omitted); Supreme Foodservice GmbH v. United States, 
    109 Fed. Cl. 369
    , 382
    (2013); Alamo Travel Grp., LP v. United States, 
    108 Fed. Cl. 224
    , 231 (2012); ManTech
    Telecomms. & Info. Sys. Corp. v. United States, 
    49 Fed. Cl. 57
    , 63 (2001), aff’d, 30 F.
    App’x 995 (Fed. Cir. 2002); Ellsworth Assocs., Inc. v. United States, 
    45 Fed. Cl. 388
    , 392
    (1999) (“Courts must give great deference to agency procurement decisions and will not
    lightly overturn them.” (citing Fla. Power & Light Co. v. Lorion, 
    470 U.S. 729
    , 743–44
    (1985))), appeal dismissed, 6 F. App’x 867 (Fed. Cir. 2001), and superseded by regulation
    as recognized in MVS USA, Inc. v. United States, 
    111 Fed. Cl. 639
     (2013).
    According to the United States Court of Appeals for the Federal Circuit:
    Effective contracting demands broad discretion. Burroughs Corp. v. United
    States, 
    223 Ct. Cl. 53
    , 
    617 F.2d 590
    , 598 (1980); Sperry Flight Sys. Div. v.
    United States, 
    548 F.2d 915
    , 921, 
    212 Ct. Cl. 329
     (1977); see NKF Eng’g,
    Inc. v. United States, 
    805 F.2d 372
    , 377 (Fed. Cir. 1986); Tidewater
    Management Servs., Inc. v. United States, 
    573 F.2d 65
    , 73, 
    216 Ct. Cl. 69
    (1978); RADVA Corp. v. United States, 
    17 Cl. Ct. 812
    , 819 (1989), aff’d, 
    914 F.2d 271
     (Fed. Cir. 1990). Accordingly, agencies “are entrusted with a good
    deal of discretion in determining which bid is the most advantageous to the
    Government.” Tidewater Management Servs., 573 F.2d at 73, 
    216 Ct. Cl. 69
    .
    Lockheed Missiles & Space Co. v. Bentsen, 
    4 F.3d at
    958–59; see also Res-Care, Inc. v.
    United States, 
    735 F.3d 1384
    , 1390 (Fed. Cir.) (“DOL [Department of Labor], as a federal
    procurement entity, has ‘broad discretion to determine what particular method of
    procurement will be in the best interests of the United States in a particular situation.’”
    (quoting Tyler Constr. Grp. v. United States, 
    570 F.3d 1329
    , 1334 (Fed. Cir. 2009))), reh’g
    en banc denied (Fed. Cir. 2014); Grumman Data Sys. Corp. v. Dalton, 
    88 F.3d 990
    , 995
    (Fed. Cir. 1996); Geo-Med, LLC v. United States, 
    126 Fed. Cl. 440
    , 449 (2016); Cybertech
    Grp., Inc. v. United States, 
    48 Fed. Cl. 638
    , 646 (2001) (“The court recognizes that the
    agency possesses wide discretion in the application of procurement regulations.”);
    Furthermore, according to the Federal Circuit:
    Contracting officers “are entitled to exercise discretion upon a broad range
    of issues confronting them in the procurement process.” Impresa
    Construzioni Geom. Domenico Garufi v. United States, 
    238 F.3d 1324
    ,
    1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,
    procurement decisions are subject to a “highly deferential rational basis
    review.” CHE Consulting, Inc. v. United States, 
    552 F.3d 1351
    , 1354 (Fed.
    Cir. 2008) (internal quotation marks omitted).
    31
    PAI Corp. v. United States, 
    614 F.3d at 1351
    ; see also Weeks Marine, Inc. v. United
    States, 575 F.3d at 1368–69 (“We have stated that procurement decisions ‘invoke[ ]
    “highly deferential” rational basis review.’ Under that standard, we sustain an agency
    action ‘evincing rational reasoning and consideration of relevant factors.’” (quoting CHE
    Consulting, Inc. v. United States, 
    552 F.3d at 1354
     (quoting Advanced Data Concepts,
    Inc. v. United States, 
    216 F.3d at 1058
    ))).
    On a motion for judgment on the administrative record, a disappointed bidder has
    the burden of demonstrating the arbitrary and capricious nature of the agency decision
    by a preponderance of the evidence. See Tinton Falls Lodging Realty, LLC v. United
    States, 800 F.3d at 1364; see also Grumman Data Sys. Corp. v. Dalton, 
    88 F.3d at
    995–
    96; Davis Boat Works, Inc. v. United States, 111 Fed. Cl. at 349; Contracting, Consulting,
    Eng’g LLC v. United States, 104 Fed. Cl. at 340. The Federal Circuit has indicated that
    “[t]his court will not overturn a contracting officer’s determination unless it is arbitrary,
    capricious, or otherwise contrary to law. To demonstrate that such a determination is
    arbitrary or capricious, a protester must identify ‘hard facts’; a mere inference or suspicion
    . . . is not enough.” PAI Corp. v. United States, 
    614 F.3d at
    1352 (citing John C. Grimberg
    Co. v. United States, 
    185 F.3d 1297
    , 1300 (Fed. Cir. 1999)); see also Turner Constr. Co.,
    Inc. v. United States, 
    645 F.3d at 1387
    ; Sierra Nevada Corp. v. United States, 
    107 Fed. Cl. 735
    , 759 (2012); Filtration Dev. Co., LLC v. United States, 
    60 Fed. Cl. 371
    , 380 (2004).
    A bid protest proceeds in two steps. First . . . the trial court determines
    whether the government acted without rational basis or contrary to law when
    evaluating the bids and awarding the contract. Second . . . if the trial court
    finds that the government’s conduct fails the APA review under 
    5 U.S.C. § 706
    (2)(A), then it proceeds to determine, as a factual matter, if the bid
    protester was prejudiced by that conduct.
    Bannum, Inc. v. United States, 
    404 F.3d at 1351
    ; FirstLine Transp. Sec., Inc. v. United
    States, 
    119 Fed. Cl. 116
    , 126 (2014); Eco Tour Adventures, Inc. v. United States, 114
    Fed. Cl. at 22; Archura LLC v. United States, 
    112 Fed. Cl. 487
    , 496 (2013). To prevail in
    a bid protest case, the protestor not only must show that the government’s actions were
    arbitrary, capricious, or otherwise not in accordance with the law, but the protestor also
    must show that it was prejudiced by the government’s actions. See 
    5 U.S.C. § 706
     (“[D]ue
    account shall be taken of the rule of prejudicial error.”); see also Glenn Def. Marine
    (ASIA), PTE Ltd. v. United States, 720 F.3d at 907 (“In a bid protest case, the inquiry is
    whether the agency's action was arbitrary, capricious, an abuse of discretion, or otherwise
    not in accordance with law and, if so, whether the error is prejudicial.”) ; Linc Gov’t Servs.,
    LLC v. United States, 
    96 Fed. Cl. 672
    , 694-96 (2010). In describing the prejudice
    requirement, the Federal Circuit also has held that:
    To prevail in a bid protest, a protester must show a significant, prejudicial
    error in the procurement process. See Statistica, Inc. v. Christopher, 
    102 F.3d 1577
    , 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 
    78 F.3d 1556
    , 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not
    required to show that but for the alleged error, the protester would have
    been awarded the contract.” Data General, 
    78 F.3d at 1562
     (citation
    32
    omitted). Rather, the protester must show “that there was a substantial
    chance it would have received the contract award but for that error.”
    Statistica, 
    102 F.3d at 1582
    ; see CACI, Inc.-Fed. v. United States, 
    719 F.2d 1567
    , 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice, protester
    must demonstrate that but for the alleged error, “‘there was a substantial
    chance that [it] would receive an award--that it was within the zone of active
    consideration.’”) (citation omitted).
    Alfa Laval Separation, Inc. v. United States, 
    175 F.3d 1365
    , 1367 (Fed. Cir.), reh’g denied
    (Fed. Cir. 1999); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d
    at 912; Allied Tech. Grp., Inc. v. United States, 
    649 F.3d 1320
    , 1326 (Fed. Cir.), reh’g en
    banc denied (Fed. Cir. 2011); Info. Tech. & Applications Corp. v. United States, 
    316 F.3d at 1319
    ; Impresa Construzioni Geom. Domenico Garufi v. United States, 
    238 F.3d at 1332-33
    ; OMV Med., Inc. v. United States, 
    219 F.3d 1337
    , 1342 (Fed. Cir. 2000);
    Advanced Data Concepts, Inc. v. United States, 
    216 F.3d at 1057
    ; Stratos Mobile
    Networks USA, LLC v. United States, 
    213 F.3d 1375
    , 1380 (Fed. Cir. 2000).
    In Data General Corp. v. Johnson, the United States Court of Appeals for the
    Federal Circuit wrote:
    We think that the appropriate standard is that, to establish prejudice, a
    protester must show that, had it not been for the alleged error in the
    procurement process, there was a reasonable likelihood that the protester
    would have been awarded the contract . . . . The standard reflects a
    reasonable balance between the importance of (1) averting unwarranted
    interruptions of and interferences with the procurement process and (2)
    ensuring that protesters who have been adversely affected by allegedly
    significant error in the procurement process have a forum available to vent
    their grievances. This is a refinement and clarification of the “substantial
    chance” language of CACI, Inc.-Fed. [v. United States], 
    719 F.2d at 1574
    .
    Data Gen. Corp. v. Johnson, 
    78 F.3d 1556
    , 1562 (Fed. Cir.), reh’g denied, en banc
    suggestion declined (Fed. Cir. 1996); see also Glenn Def. Marine (ASIA), PTE Ltd. v.
    United States, 720 F.3d at 912; Bannum, Inc. v. United States, 
    404 F.3d at 1353, 1358
    (“The trial court was required to determine whether these errors in the procurement
    process significantly prejudiced Bannum . . . . To establish ‘significant prejudice’ Bannum
    must show that there was a ‘substantial chance’ it would have received the contract award
    but for the [government’s] errors” in the bid process. (citing Info. Tech. & Applications
    Corp. v. United States, 
    316 F.3d at 1319
    ; Alfa Laval Separation, Inc. v. United States,
    
    175 F.3d at 1367
    ; Statistica, Inc. v. Christopher, 
    102 F.3d at 1581
    ; Data Gen. Corp. v.
    Johnson, 
    78 F.3d at 1562
    ); see also Todd Constr., L.P. v. United States, 
    656 F.3d 1306
    ,
    1315 (Fed. Cir. 2011); Advanced Data Concepts, Inc. v. United States, 
    216 F.3d at 1057
    (using a “reasonable likelihood” rule); Stratos Mobile Networks USA, LLC v. United
    States, 
    213 F.3d at 1380
     (using a “substantial chance” test); Archura LLC v. United
    States, 112 Fed. Cl. at 496 (using a “substantial chance” test); Info. Scis. Corp. v. United
    States, 
    73 Fed. Cl. 70
    , 96 (2006) (using a “substantial chance” test), recons. in part, 
    75 Fed. Cl. 406
     (2007).
    33
    In this post-award bid protest, the parties dispute whether DHA’s evaluation of the
    proposals was reasonable and in compliance with the terms of the solicitation. The issue
    in this bid protest is whether the solicitation required DHA to perform a price realism
    analysis, and, if so, whether such an analysis of the offerors’ proposals was done by DHA.
    As explained further below, a price realism analysis considers whether an offeror’s price
    is too low, such that it indicates a risk of poor performance and a lack of understanding
    of the solicitation requirements. See KWR Constr., Inc. v. United States, 
    124 Fed. Cl. 345
    ,
    356 (2015) (“Generally, a price realism analysis examines the performance risk of
    proposals in a fixed-price contract procurement, with particular attention to the risk of low-
    priced proposals. . . .”) (internal citations removed). A price realism analysis differs from
    a price reasonableness analysis because a price reasonableness analysis considers
    whether an offeror’s price is too high.16 See Munilla Constr. Mgmt., LLC v. United States,
    
    130 Fed. Cl. 635
    , 649 (2017) (explaining that an agency’s concern in making a price
    reasonableness determination is whether the prices are too high, and a “determination of
    whether an offeror’s prices are too low is made when an agency conducts a cost or price
    realism analysis”); see also EMTA Isaat, A.S. v. United States, 
    123 Fed. Cl. 330
    , 338 n.9
    (2015) (“In general, a price reasonableness analysis has the goal of preventing the
    government from paying too much for contract work. A price realism analysis, on the other
    hand, investigates whether the contractor is proposing a price so low that performance of
    the contract will be threatened.”). Price realism is not defined in the FAR. See Mil-Mar
    Century Corp. v. United States, 
    111 Fed. Cl. 508
    , 541 n.36 (2013).17
    Judges of this court have found that, in a fixed-price procurement, an agency is
    required to perform a price realism analysis when the solicitation expressly provides that
    the agency will evaluate price realism or states that “[t]he Government may reject any
    proposal that is . . . unreasonably high or low in price when compared to Government
    estimates, such that the proposal is deemed to reflect an inherent lack of competence of
    [sic] failure to comprehend the complexity and risks of the program.” ViON Corp. v. United
    States, 
    122 Fed. Cl. 559
    , 573 (2015) (emphasis removed) (finding that such language
    commits the agency to conducting a price realism analysis); see also EMTA Isaat, A.S.
    v. United States, 123 Fed. Cl. at 338 (explaining that there “is no dispute that the plain
    language of the RFP required the government to conduct a price realism analysis” when
    the solicitation provided that “[a]ll offerors[’] proposed prices will be evaluated to ensure
    they are realistic, reasonable, and complete”); D & S Consultants, Inc. v. United States,
    16FAR Part 15.404-1(a) requires a price reasonableness evaluation and provides that the
    “contracting officer is responsible for evaluating the reasonableness of the offered prices”
    in a negotiated procurement. 
    48 C.F.R. § 15.404-1
    (a)(1) (2017). The parties do not
    dispute that the agency considered price reasonableness.
    17 Unlike price realism, FAR 15.404-1(d) defines a cost realism analysis as “the process
    of independently reviewing and evaluating specific elements of each offeror's proposed
    cost estimate to determine whether the estimated proposed cost elements are realistic
    for the work to be performed; reflect a clear understanding of the requirements; and are
    consistent with the unique methods of performance and materials described in the
    offeror's technical proposal.” 
    48 C.F.R. § 15.404-1
    (d)(1).
    34
    
    101 Fed. Cl. 23
    , 33 (2011), aff'd, 
    484 F. App'x 558
     (Fed. Cir. 2012) (explaining that the
    parties agreed that the solicitation required a price realism analysis because it stated
    “[t]he Government may evaluate the offeror's proposed labor rates to determine if the
    proposed rates are unrealistically low in order to assess the ability of the offeror to meet
    the PWS requirements and whether the proposal provides the Government with a high
    level of confidence of successful performance”). In Afghan American Army Services Corp.
    v. United States, another Judge on this court determined that an agency was required to
    conduct a price realism evaluation because the solicitation stated that the agency would
    “evaluate price proposals to determine whether the offered price reflects a sufficient
    understanding of the contract requirements and the risk inherent in the offeror's approach”
    and that proposals with “an unreasonable (high or low) price may be deemed to be
    unacceptable and may not receive further consideration.” Afghan Am. Army Servs. Corp.
    v. United States, 
    90 Fed. Cl. 341
    , 357 (2009). Similarly, in Rotech Healthcare, Inc. v.
    United States, the court concluded that a price realism analysis was required because
    the solicitation stated that an “unrealistically low price may be grounds for eliminating a
    proposal.” Rotech Healthcare, Inc. v. United States, 
    121 Fed. Cl. 387
    , 404 (2015), appeal
    dismissed (Fed. Cir. No. 15-5113 Nov. 13, 2015) (explaining that “the only reason any
    consideration of realism is necessary is the language in the RFP stating that
    unrealistically low offers may be eliminated”).
    In this post-award bid protest, protestor argues that DHA improperly failed to
    conduct a price realism analysis, and, therefore, violated the plain language of the
    solicitation. As a result of this failure, protestor argues that DHA’s award decisions to
    Humana and Health Net were arbitrary and capricious and not in accordance with the
    law. Protestor points to the following language in Section M.2.2. of the solicitation: “The
    Government may reject any proposal that is evaluated to be unrealistic in terms of
    program commitments, contract terms and conditions such that the proposal is deemed
    to reflect an inherent lack of competence or failure to comprehend the complexity and
    risks of the program,” as the solicitation term that allegedly required DHA to conduct a
    realism analysis of the offerors’ proposed PMPM prices and Guaranteed Network
    Provider discounts. Protestor points to the term “unrealistic” in Section M.2.2. and asserts
    that “realism is the evaluation of an offeror’s understanding through the lens of price and
    price elements.” During oral argument, protestor’s counsel argued that “the word ‘realism’
    and ‘unrealistic’ means an evaluation of price.” Protestor argues that, because the
    offerors’ proposed PMPM prices and the Guaranteed Network Provider discounts were
    “contract terms” and Section M.2.2. of the solicitation explained that DHA “may reject any
    proposal that is evaluated to be unrealistic in terms of program commitments, contract
    terms and conditions,” pursuant to the language of the solicitation, DHA was obligated to
    consider the realism of the offerors’ proposed PMPM prices and Guaranteed Network
    Provider discounts. Protestor also asserts that the proposed level of effort associated with
    the PMPM prices represented the offerors’ “program commitment” to perform the
    administrative services required by the solicitation, thus, DHA was required to consider
    the realism of the proposed levels of effort because it was a “program commitment.”18
    18 Protestor also argues that, to the extent the court finds the solicitation to be ambiguous,
    that ambiguity was latent and must be construed against DHA. Defendant and defendant-
    intervenors, however, argue that, if the court were to find the solicitation to be ambiguous,
    35
    Protestor asserts that an “evaluation of the offerors’ technical proposals alone—without
    consideration of PMPM prices and guaranteed discounts—does not satisfy Section
    M.2.2.’s realism requirement.” Protestor argues that “the plain language of Section M.2.2.
    obligated DHA to evaluate whether each offeror’s PMPM prices and level of effort were
    realistic to accomplish the Administrative Services required under” the solicitation, and
    whether each offeror’s Guaranteed Network Provider discount was realistic “and would
    allow the offeror to provide a network that meets the standards and produces best quality
    clinical outcomes for TRICARE beneficiaries.”
    Protestor also contends that the word “price” need not be expressly used in the
    solicitation in order to trigger a requirement to evaluate price realism. According to
    protestor, language in a solicitation indicating that a proposal may be rejected if it is
    “deemed to reflect an inherent lack of competence or failure to comprehend the
    complexity and risks of the program,” is “classic realism language.” Protestor asserts that,
    even if a solicitation does not expressly call for a price realism analysis, such an
    evaluation may be required when the “other classic indicia of price realism” are present.
    According to protestor, that Section M.2.2. stated that DHA “may reject any proposal that
    is evaluated to be unrealistic” did not give DHA discretion over whether to conduct an
    evaluation of realism. (emphasis added). To support its position, protestor relies on the
    decision in the bid protest regarding the awards at issue first filed by M&V at the GAO,
    UnitedHealth Military & Veterans Services, LLC, et al., B-411837.2 et al., which found
    that Section M.2.2. required DHA to perform a price realism analysis, although that
    decision also found that the agency had met the requirements of performing a price
    realism analysis. Protestor also cites to previous decisions of this court that considered
    solicitation language which stated that an agency may reject proposals evaluated to be
    unrealistic, including FCN, Inc. v. United States, 
    115 Fed. Cl. 335
    , 376 (2014), and ViON
    Corp. v. United States, 
    122 Fed. Cl. 559
    , 564 (2015), which found that the government
    was required to evaluate price realism. Protestor asserts that in FCN, Inc. v. United
    States, “the RFP stated that ‘unrealistically low offers may be considered unacceptable
    and rejected on that basis,’” and the court concluded that this language obligated the
    government to evaluate price realism. FCN, Inc. v. United States, 115 Fed. Cl. at 376
    (emphasis in original). According to protestor, in ViON Corp., the court found that the
    agency was required to conduct a price realism analysis when the solicitation “expressly
    provides that ‘[t]he Government may reject any proposal that is . . . unreasonably high or
    low in price when compared to Government estimates, such that the proposal is deemed
    then it was patently ambiguous and M&V has waived its ability to assert its interpretation,
    and, moreover, that extrinsic evidence demonstrates that the solicitation did not require
    a price realism analysis. Defendant and defendant-intervenors point out, citing protestor’s
    question during the question and answer period prior to the submission of proposals, that
    protestor believed that the solicitation did not provide for a price realism evaluation.
    Defendant-intervenor Health Net argues that protestor’s price realism interpretation “was
    conceived for the first time during the GAO bid protest process.” Given the court’s finding,
    however, it need not reach this issue.
    36
    to reflect an inherent lack of competence of [sic] failure to comprehend the complexity
    and risks of the program.’” (second emphasis added). Protestor, M&V, argues that “[t]he
    only difference” between the clause in ViON Corp. and “the one at issue here is that the
    clause in ViON [Corp.] refers to unreasonably high or low prices, while the clause here
    refers to unrealistic contract terms and program commitments.” Protester contends that,
    because PMPM prices and Guaranteed Network Provider discounts are contract terms
    they should have been “subject to a realism evaluation under the plain terms of Section
    M.2.2.”
    Additionally, protestor argues that the location of Section M.2.2. within the
    solicitation is irrelevant. According to protestor, that Section M.2.2. is at the beginning of
    Section M of the solicitation and precedes the discussion of the price/cost factor
    evaluation criteria does not remove the obligation to conduct a price realism analysis.
    Protestor cites two GAO decisions: Logistics 2020 Inc., B-408543, 
    2013 WL 6235560
    , at
    *6 (Comp. Gen. Nov. 6, 2013) and B&B Medical Services, Inc., B-409705.4, 
    2015 WL 4480686
    , at *7 (Comp. Gen. June 29, 2015). Protestor contends that finding solicitation
    language to require a price realism analysis only when it is contained within certain
    sections of a solicitation would render Section M.2.2. superfluous and be inconsistent with
    the fundamental principle of interpretation that meaning must be given to all parts of a
    solicitation.
    Protestor further asserts that, contrary to the conclusion in the GAO decision, there
    is no evidence in the contemporaneous administrative record that DHA conducted a
    required price realism evaluation. Although the GAO determined in UnitedHealth Military
    & Veterans Services, LLC, et al., B-411837.2 et al., that DHA, in fact, had conducted a
    realism evaluation, protestor contends that the administrative record “proves otherwise”
    and that this court should afford “no deference” to that part of the GAO decision. Protestor
    points out that neither the P/CT [price/cost team] reports, the technical evaluation team
    reports, nor the source selection decision documents assessed whether the offerors’
    proposed PMPM prices were realistic. Similarly, as with PMPM prices, protestor asserts
    that “the evaluation record is entirely devoid of any realism analysis of the offerors’
    proposed guaranteed network discounts.”
    Protestor argues that it was prejudiced by DHA’s failure to evaluate price realism.
    According to protestor, “[h]ad DHA performed a realism analysis, it would have realized
    that the awardees’ [for both the East and West Region contracts] PMPM prices and
    guaranteed discounts put the success of the contract[s] at risk, endangering DoD’s ability
    to ensure high-quality, cost-effective care for military members and their families.”
    Protestor explains that an awardee that proposes unrealistic prices and an inadequate
    level of effort for the PMPM CLINs puts the contract at risk because “all of the critical
    administrative services required under the contract” would be performed under these
    CLINs, including “building and maintaining a network to provide quality care to DoD
    personnel and their families; providing medical management to ensure that care is both
    high-quality and cost effective; processing claims in an accurate and timely manner; and
    providing other services to beneficiaries, providers, and the government.” Protestor
    argues that Humana and Health Net proposed PMPM prices in the East and West regions
    that were [Redacted] and [Redacted] lower than the ICE, respectively, as opposed to
    37
    protestor’s proposed PMPM prices which were higher than the ICE. With regard to the
    proposed Guaranteed Network Provider discounts, protestor states that the “TRICARE
    program already pays rates that are materially below commercial market rates, and
    guaranteed discounts under the RFP reduce those payments still further” such that
    “[d]eeper discounts and lower payments reduce the number of providers (and especially
    high-quality, in-demand providers) willing to join the network.” As stated by protestor, as
    a result of deeper discounts and lower payments to providers, “[t]he network shrinks,
    quality of care suffers, and costs jump.” Protestor alleges that Humana and Health Net
    proposed Guaranteed Network Provider discounts that exceeded the historical
    benchmark contained in the contemporaneous record, and “because DHA failed to
    evaluate the realism of the offerors’ discounts, the agency never considered whether the
    awardees’ proposed discounts were too aggressive and would result in adverse effects
    on the network and healthcare costs.” Additionally, protestor argues that DHA “failed to
    assess the impact of the awardees’ low underwritten healthcare cost fixed fees on the
    proposed discounts,” and, thus, failed to account for the risk that “Humana and Health
    Net will be motivated to achieve their discounts, even if it means degrading quality of care
    and higher costs for the government and beneficiaries.” Protestor states that “it proposed
    realistic PMPM prices and levels of effort, and discounts right in line with historical
    experience” such that “had DHA assessed the realism of the offerors’ proposals as they
    stand, UnitedHealth would have been in a better position to win the East or West region
    awards.”
    In the alternative, protestor asserts the questionable and speculative argument
    that, had M&V known DHA would not conduct a price realism analysis, M&V “would have
    been more aggressive with its pricing, and leveraged its position as an insurer with a
    national presence” in order to propose a greater Guaranteed Network Provider discount
    and a lower underwritten healthcare fixed fee, which, according to protestor, would have
    resulted in a substantial chance of award to M&V. Why protestor would not have
    submitted its most competitive proposals in the first instance alludes the court. Moreover,
    protestor appears to suggest that it might have reduced its proposal prices just to get the
    contract award, even though, presumably, it had calculated the most appropriate offers
    pursuant to which it could properly meet the scopes of the work detailed in the contracts,
    when it submitted its proposals in response to the solicitation at issue.
    In opposition, defendant and defendant-intervenors argue that the plain language
    of the solicitation did not require, “or permit,” a price realism analysis and, to the extent a
    price realism analysis was required, the administrative record demonstrates that DHA’s
    evaluation of the offerors’ proposals satisfied any possible requirement to evaluate the
    realism of the proposed PMPM prices and Guaranteed Network Provider discounts.
    Defendant explains that, although agencies are always required to perform a price
    reasonableness evaluation before awarding a contract under FAR § 15.402(a) (2017),
    the solicitation language determines whether an agency is required to evaluate proposals
    for price realism. Citing FAR § 15.404-1(d)(2), defendant asserts that, when evaluating
    proposals for a fixed-price contract, agencies are not always required to conduct a price
    realism analysis. According to defendant, “absent an express price realism provision” an
    agency only should perform a price realism evaluation on a fixed-price contract when the
    38
    solicitation “1) expressly states that the agency will review prices to determine whether
    they reflect a lack of technical understanding; and 2) states that a vendor/offeror’s
    submission may be rejected on the basis of low prices.” Defendant cites to the GAO’s
    decision in ERIMAX, B-410682, 
    2015 WL 993532
    , at *4 (Comp. Gen. Jan. 22, 2015).
    Defendant argues that neither of the scenarios that would permit or require an agency to
    conduct a price realism evaluation are applicable to the “T-2017” procurement.
    Defendant and defendant-intervenors also assert that protestor “attempts to read
    Section M.2.2. in isolation, rather than in the context of the rest of the evaluation criteria.”
    Defendant and defendant-intervenors explain that Section M.2.2., which contained the
    language protestor relies upon to assert its price realism claim, preceded Sections M.3-
    M.10, which set forth the factors and subfactors that DHA was required to consider in its
    evaluation of the proposals, and DHA’s evaluation was limited to those factors and
    subfactors. Defendant argues that Section M.2.2. did not create new factors or subfactors
    for DHA to employ. According to defendant, Section M.2.2. “simply gave DHA the
    discretion to immediately reject a proposal that was ‘evaluated to be unrealistic in terms
    of program commitments, contract terms and conditions such that the proposal is deemed
    to reflect an inherent lack of competence or failure to comprehend the complexity and
    risks of the program’” based on the factors and subfactors specified in Sections M.3-M.10
    of the solicitation.
    To further support the argument that Section M.2.2. offered DHA a discretionary
    basis for rejection and did not impose a requirement to analyze price realism, defendant
    and defendant-intervenors assert also that Section M.2.2. did not include language such
    as “will,” “shall,” or “must,” but provided a basis on which DHA “may reject any proposal
    that is evaluated to be unrealistic in terms of program commitments, contract terms and
    conditions.” (emphasis added). According to defendant and defendant-intervenors, unlike
    Sections M.3-M.10, which employed terms such as “will evaluate” and “will perform,”
    Section M.2.2. did not commit the agency to any additional evaluation requirements.
    Given that the solicitation used non-discretionary language throughout Section M,
    defendant argues that, if DHA intended to include a mandatory requirement in Section
    M.2.2., then it would have included mandatory language similar to other provisions of
    Section M.
    With regard to the cases on which protestor relies to support its position, including
    ViON Corp. and FCN. Inc., defendant and defendant-intervenors argue that the cases are
    distinguishable from the “T-2017” procurement. Defendant and defendant-intervenors
    assert that those cases discuss solicitations that expressly stated offerors’ proposals
    could be rejected based on low prices, and Section M.2.2. in the solicitation now under
    review does not reference low prices. Additionally, defendant and defendant-intervenors
    argue that the cases on which protestor relies discussed solicitations in which the price
    realism requirement was included in the price factor, but the “T-2017” solicitation did not
    reference price realism in Section M.9, the price/cost factor.
    Defendant and defendant-intervenors also argue that, even if the court were to
    determine that Section M.2.2. required DHA to evaluate the realism of the offerors’
    Guaranteed Network Provider discounts and PMPM prices, the administrative record
    39
    demonstrates that DHA’s evaluation of the offerors’ proposals satisfied that requirement.
    Defendant and defendant-intervenors assert that the nature and extent of a price realism
    evaluation is within the broad discretion of the agency. Defendant and defendant-
    intervenors argue that, according to the several hundred pages of evaluation and decision
    documents, the Source Selection Authority conducted an integrated assessment of the
    proposals and determined that the offerors understood the requirements of the solicitation
    and demonstrated their capability to satisfy the requirements. Defendant also argues that
    the price/cost evaluation team “effectively considered” the realism of the offerors’ prices
    because the team compared the prices of the offerors against each other and against the
    ICE and found the prices to be in the “range of reasonableness” even though the prices
    were below the ICE.
    Defendant and defendant-intervenors further argue that, even if the court were to
    find that DHA was required to conduct a price realism evaluation, and even if DHA did not
    do so, still protestor could not prevail in this bid protest because protestor has not
    demonstrated that it has suffered prejudice. Defendant and defendant-intervenors assert
    that, in order to sufficiently demonstrate prejudice, protestor must show that, if DHA had
    conducted the price realism evaluation there is a substantial chance that DHA would have
    found the other offerors’ proposals to have lacked in competence and failed to
    comprehend the complexity and risks of the program. Defendant and defendant-
    intervenors contend that such a finding would be unlikely given that both Humana and
    Health Net are established healthcare companies that have satisfactory, or better, past
    performance records, both submitted strong technical proposals that demonstrated a
    clear understanding of the contract requirements, and both proposed comparable
    prices.19 Defendant further argues that protestor has failed to demonstrate irreparable
    harm and that the public interest weighs against an injunction as it would result in delays
    to TRICARE program improvements designed to improve military readiness and the
    quality of healthcare for military members, retirees, and their families.
    Although protestor asks this court to arrive at the same result that the GAO found
    in UnitedHealth Military & Veterans Services, LLC, et al., B-411837.2, et al., that a price
    realism analysis was required, this court has a different view. The GAO found that Section
    19 Because the court finds that a price realism analysis was not required, the court does
    not get to the issue of prejudice. Yet, the court notes that the basis for rejection is an
    “inherent lack of competence or failure to comprehend the complexity and risks of the
    program.” Given the prior participation of both Humana and Health Net in the immediately
    previous “T-3” contracts, it is not surprising that DHA did not find Humana and Health Net
    to lack a basic understanding of the “program commitments, contract terms and
    conditions,” including the complexity and risks of the program. Moreover, the outlying
    price proposals for both the East and West Region contracts were submitted by M&V,
    which submitted a price approximately two billion dollars higher than the awardee’s price
    proposal for the East Region contract and approximately one billion dollars higher than
    the awardee’s price proposal for the West Region contract. All of the other offerors
    submitted price proposals that were relatively close in value.
    40
    M.2.2. required DHA to perform a price realism analysis.20 In its decision, the GAO
    explained “[w]e have held that where, as here, a solicitation puts offerors on notice that a
    procuring agency may reject proposals that are evaluated as being unrealistic, the
    agency's rejection of proposals is discretionary, but the realism evaluation is mandatory.”
    UnitedHealth Military & Veterans Servs., LLC, et al., B-411837.2 et al., 
    2016 WL 6821970
    ,
    at *5. Although the undersigned has high regard for the GAO and the quality of the
    decisions issued by the GAO, this court is not bound by decisions of the GAO. See CBY
    Design Builders v. United States, 
    105 Fed. Cl. 303
    , 341 (2012) (citing Centech Grp., Inc.
    v. United States, 
    554 F.3d 1029
    , 1038 n.4 (Fed. Cir. 2009) (GAO decisions are “not
    binding” authority, but may be “instructive in the area of bid protests.”)). In finding that
    Section M.2.2. required a realism evaluation, the GAO decision did not explain its basis
    other than to cite to previous GAO decisions in which the GAO determined that such an
    evaluation is required when (1) the solicitation expressly states that the agency will review
    prices to determine whether they are so low that they reflect a lack of technical
    understanding, and (2) the solicitation states that a proposal can be rejected for offering
    low prices. See UnitedHealth Military & Veterans Servs., LLC, et al., B-411837.2 et al.,
    
    2016 WL 6821970
    , at *5 (citing [with no comment] Optex Sys., Inc., B-408591, 
    2013 WL 5946181
    , at *3; Esegur–Empresa de Seguranca, SA, B-407947 et al., 
    2013 WL 1898790
    ,
    at *4 (Comp. Gen. Apr. 26, 2013); Waterfront Techs., Inc.-Protest and Costs, B-
    401948.16 et al., 
    2011 WL 2566578
    , at *15-16 (Comp. Gen. June 24, 2011)). In this bid
    protest, the solicitation did not state that the agency would review prices to determine
    whether they reflected a lack of understanding or that proposals could be rejected for
    offering low prices. In fact, notably absent from the plain language of Section M.2.2. is the
    word “price.” As a result, offerors were not put on notice that their proposals would be
    evaluated for price realism. Given the GAO precedent discussed below, it appears that
    the GAO’s decision in United Health Military & Veterans Services LLC, et al., B-411837.2
    et al., takes a different approach than the majority of previous GAO decisions. Thus, it is
    not clear why the GAO concluded that Section M.2.2. required a price realism analysis
    and the court does not find the GAO’s decision in UnitedHealth Military & Veterans
    Services, LLC, et al. persuasive.
    The administrative record in this bid protest demonstrates DHA’s extensive
    evaluation process and source selection methodology. As protestor asserts, agencies are
    required to evaluate proposals and make contract awards based on the criteria set forth
    in the solicitation. See NEQ, LLC v. United States, 
    88 Fed. Cl. 38
    , 47–48 (2009) (“It is
    hornbook law that agencies must evaluate proposals and make awards based on the
    criteria stated in the solicitation.”). It is equally well-established that agencies cannot
    evaluate proposals based on criteria that are not disclosed in the solicitation. See NVE,
    Inc. v. United States, 
    121 Fed. Cl. 169
    , 180 (2015). This court in Banknote Corp. of
    America, Inc. v. United States stated:
    20 As explained above, the GAO determined that DHA was required to consider price
    realism and that the agency adequately considered price realism. While asking the court
    to adhere to the GAO decision that a price realism analysis was required, protestor asks
    this court to afford “no deference” to the GAO’s conclusion that DHA adequately
    considered price realism.
    41
    It is hornbook law that agencies must evaluate proposals and make awards
    based on the criteria stated in the solicitation. This requirement is firmly
    rooted in the Competition in Contracting Act (CICA) . . . which indicate[s]
    that an agency shall evaluate competitive proposals and assess their
    qualities solely on the factors and subfactors specified in the solicitation.
    See 
    10 U.S.C. §§ 2305
    (a)(2)(A), 2305(a)(3)(A) (2000) . . . . It thus is beyond
    peradventure that the government may not rely upon undisclosed
    evaluation criteria in evaluating proposals, Acra, Inc. v. United States, 
    44 Fed. Cl. 288
    , 293 (1999), and, where appropriate, must disclose the factors'
    relative importance, Isratex, Inc. v. United States, 
    25 Cl. Ct. 223
    , 230
    (1992). See also Cube Corp. v. United States, 
    46 Fed. Cl. 368
    , 377 (2000);
    Dubinsky v. United States, 
    43 Fed. Cl. 243
    , 266 (1999). That said, an
    agency still has “great discretion in determining the scope of an evaluation
    factor.” Forestry Surveys and Data v. United States, 
    44 Fed. Cl. 493
    , 499
    (1999). Consistent with these precepts, in a case such as this, a protester
    must show that: (i) the procuring agency used a significantly different basis
    in evaluating the proposals than was disclosed; and (ii) the protester was
    prejudiced as a result—that it had a substantial chance to receive the
    contract award but for that error.
    ***
    [I]t is well-settled that “a solicitation need not identify each element to be
    considered by the agency during the course of the evaluation where such
    element is intrinsic to the stated factors.” Analytical & Research Tech., Inc.
    v. United States, 
    39 Fed. Cl. 34
    , 45 (1997)[.]
    Banknote Corp. of Am., Inc. v. United States, 
    56 Fed. Cl. 377
    , 386-87 (2003), aff’d, 
    365 F.3d 1345
     (Fed. Cir. 2004) (footnote and other citations omitted); see also NVE, Inc. v.
    United States, 121 Fed. Cl. at 180; Transatlantic Lines, LLC. v. United States, 
    122 Fed. Cl. 624
    , 632 (2015); FirstLine Transp. Sec., Inc. v. United States, 
    100 Fed. Cl. 359
    , 388
    (2011) (“It is a fundamental principle of procurement law that an agency must conduct its
    best-value analysis using the evaluation factors and subfactors specified in the
    solicitation.” (citing 
    48 C.F.R. § 15.101
    –1(b)(1) (2011); 
    48 C.F.R. § 15.305
    (a) (2011);
    Acra, Inc. v. United States, 
    44 Fed. Cl. 288
    , 293 (1999))); PlanetSpace, Inc. v. United
    States, 92 Fed. Cl. at 536-37; NEQ, LLC v. United States, 88 Fed. Cl. at 47-48; PHT
    Supply Corp. v. United States, 
    71 Fed. Cl. 1
    , 13-14 (2006).
    In accordance with the well-established principle that an agency must evaluate
    proposals in accordance with the solicitation terms, it is improper for an agency to conduct
    a price realism analysis in a fixed-price procurement when the solicitation does not
    expressly or implicitly require a price realism analysis because such an analysis would
    employ unstated evaluation criteria. See NVE, Inc. v. United States, 121 Fed. Cl. at 180;
    see also Ceres Envtl. Servs., Inc. v. United States, 
    97 Fed. Cl. 277
    , 306 (2011) (“In
    situations where the solicitation does not expressly or implicitly require a price realism
    analysis, it is improper for an agency to conduct a price realism analysis and then reject
    a proposal for having an unrealistically low price.”); DMS All-Star Joint Venture v. United
    42
    States, 90 Fed. Cl. at 663 n.11 (“A price realism analysis is analysis to determine if the
    offeror’s proposed prices are unrealistically low.” (emphasis in original) (internal citations
    removed)); Munilla Constr. Mgmt., LLC v. United States, 130 Fed. Cl. at 649 (“Nothing in
    the Solicitation indicates the Navy would assess price as a proxy for determining an
    offeror’s understanding of contract requirements and nothing otherwise committed the
    Navy to a realism analysis.”); Afghan Am. Army Servs. Corp. v. United States, 90 Fed.
    Cl. at 356. Generally, when an award of a fixed-price contract is contemplated, “a
    proposal's price realism is not ordinarily considered, since a fixed-price contract places
    the risk” of loss on the contractor. See Acad. Facilities Mgmt. v. United States, 
    87 Fed. Cl. 441
    , 466 (2009) (citing FAR 15.404–1). Absent instruction from the solicitation, an
    agency is not required, or permitted, to consider realism in a fixed-price contract because
    “the fixed price task order puts the risk of underpriced offers on the contractor.” Rotech
    Healthcare, Inc. v. United States, 121 Fed. Cl. at 404; see also Afghan Am. Army Servs.
    Corp. v. United States, 90 Fed. Cl. at 356. In a fixed-price procurement, when the
    solicitation does not expressly or implicitly state that a price realism analysis would be
    conducted, and the agency conducts a price realism analysis, an offeror can challenge
    the analysis as “arbitrary, capricious, or an abuse of discretion” because the agency
    would have relied upon undisclosed evaluation criteria in making its award. See NVE, Inc.
    v. United States, 121 Fed. Cl. at 180; see also Banknote Corp. of Am., Inc. v. United
    States, 56 Fed. Cl. at 386.
    In the above-captioned bid protest, if, in the solicitation, DHA had committed itself
    to evaluating the realism of the offerors’ proposed PMPM prices and Guaranteed Network
    Provider discounts, then DHA would have been required to perform a price realism
    evaluation. Conversely, if the solicitation did not require a price realism analysis, then
    DHA was not permitted to evaluate the realism of the offerors’ prices, including the
    proposed PMPM prices and Guaranteed Network Provider discounts. Thus, in this post-
    award bid protest, the court is tasked with determining whether the solicitation, specifically
    Section M.2.2., required DHA to evaluate the realism of the offerors’ proposed PMPM
    prices and Guaranteed Network Provider discounts. To make this determination, the court
    looks to the plain language of the solicitation, specifically Section M.2.2. See Per Aarsleff
    A/S v. United States, 829 F.3d at 1309 (explaining that, when the interpretation of a term
    in a solicitation is contested, the court should begin with the plain language of the
    document); see also Banknote Corp. of Am., Inc. v. United States, 
    365 F.3d at 1353
    (holding that “[i]nterpretation of the solicitation is a question of law over which we exercise
    independent review. . . . We begin with the plain language of the document”); Fulcra
    Worldwide, LLC v. United States, 
    97 Fed. Cl. 523
    , 538-39 (2011) (“Interpretation of the
    solicitation begins with the plain language of the document.”); Linc Gov’t Servs., LLC v.
    United States, 96 Fed. Cl. at 708 (explaining that the “well-settled principles of contract
    interpretation . . . apply with equal force to the interpretation of government solicitations”
    and “require the court to begin with the plain language of an agency’s solicitation”). In
    interpreting the meaning of a solicitation term, the court must consider the solicitation as
    a whole, “interpreting it in a manner that harmonizes and gives reasonable meaning to all
    of its provisions.” See Per Aarsleff A/S v. United States, 829 F.3d at 1309 (citing Banknote
    Corp. of Am., Inc. v. United States, 
    365 F.3d at 1353
    ); see also Fulcra Worldwide, LLC v.
    United States, 97 Fed. Cl. at 538 (explaining that context defines the meaning of any
    given term or provision in a government solicitation).
    43
    As set forth above, Section M.2.2. of the solicitation stated:
    M.2.2. Unrealistic Proposals. The Government may reject any proposal
    that is evaluated to be unrealistic in terms of program commitments,
    contract terms and conditions such that the proposal is deemed to reflect
    an inherent lack of competence or failure to comprehend the complexity and
    risks of the program.
    The plain language of the solicitation at issue does not further define the specific “program
    commitments, contract terms and conditions” that DHA could find to be unrealistic in an
    offeror’s proposal, but the language does describe the conditions upon which the agency
    can reject a proposal. During oral argument, protestor argued that “contract terms and
    conditions, by its plain terms, includes price” because “[t]he price is a term of the proposal
    which then becomes a term of the contract.” To the extent protestor is arguing that price
    is an essential contract term, the court rejects the contention that any reference in a
    solicitation to evaluating the realism of contract terms would necessitate a price realism
    analysis. Although an agency may implicitly commit to conducting a price realism analysis
    in certain instances, the mere reference to the realism of contract terms is insufficient to
    trigger the detailed and in-depth analysis required in a price realism evaluation.
    Although, in addition to ViON Corp. v. United States and FCN, Inc. v. United States,
    protestor also cites the following cases to support its position that DHA was required to
    conduct a price realism analysis, each of these cases is distinct from the above-captioned
    bid protest, and not helpful to protestor: Erinys Iraq Ltd. v. United States, 
    78 Fed. Cl. 518
    ,
    531 (2007), in which the court explained that the solicitation expressly required a “Price
    Realism Analysis” that would “be a separate review and evaluation of the proposed price
    to determine the degree to which an offeror proposed realistic prices”; Dyncorp Int'l LLC,
    B-407762.3, 
    2013 WL 3475184
    , at *8 (Comp. Gen. June 7, 2013), in which the GAO
    found that the solicitation did not require a price realism analysis because nothing in the
    solicitation stated that the agency planned to evaluate proposed prices to determine
    whether they were so low that they reflected a lack of technical understanding, and
    nothing in the solicitation stated that the agency could reject a proposal for offering
    unrealistically low prices; NJVC, LLC, B-410035, 
    2014 WL 5358430
    , at * 9 (Comp. Gen.
    Oct. 15, 2014), in which the GAO concluded that absent a clear indication in the RFP that
    price would be considered in assessing technical understanding or performance risk
    under the technical and management factors, the agency was neither required to nor
    permitted to consider an offeror's price under these factors; Sci. Applications Int'l Corp.,
    B-407105, 
    2012 WL 5521341
    , at *8 (Comp. Gen. Nov. 1, 2012), in which the GAO found
    that the solicitation effectively provided for a price realism evaluation when it indicated
    that the agency would evaluate price proposals to determine whether proposed prices
    were compatible with the scope of effort, were not unbalanced, and were neither
    excessive nor insufficient for the effort to be accomplished, and that this may be grounds
    for eliminating a proposal from competition on the basis that the offeror does not
    understand the requirement; Flight Safety Servs. Corp., B-403831, 
    2010 WL 5241433
    , at
    *4 (Comp. Gen. Dec. 9, 2010), in which the GAO found that, although the solicitation did
    44
    not state that offerors' prices would be evaluated for realism, it effectively provided for
    such an evaluation when it established that the Air Force could reject a proposal if the
    offeror's low price reflected an inherent lack of competence or failure to comprehend the
    complexity and risks of the program. In each of these cases, when a price realism analysis
    was required, the solicitation explicitly referred to “price” or “rates.” As noted above,
    Section M.2.2. does not include the word “price.”
    As these cases explain, this court has previously concluded that an agency is
    committed to conducting a price realism analysis when the solicitation provides that “[t]he
    Government may reject any proposal that is . . . unreasonably high or low in price when
    compared to Government estimates, such that the proposal is deemed to reflect an
    inherent lack of competence [or] failure to comprehend the complexity and risks of the
    program.” ViON Corp. v. United States, 122 Fed. Cl. at 573.21 Similarly, the GAO has
    explained:
    [E]ven where a solicitation does not expressly require a price realism
    evaluation, we will conclude that such an evaluation is required where (1)
    the RFP expressly states that the agency will review prices to determine
    whether they are so low that they reflect a lack of technical understanding,
    and (2) the RFP states that a proposal can be rejected for offering low
    prices.
    Optex Sys., Inc., B-408591, 
    2013 WL 5946181
    , at *3 (Comp. Gen. Oct. 30, 2013) (finding
    that the agency was required to consider price realism because the solicitation included
    price language similar to that quoted above) (emphasis added). Although protestor cites
    to Dyncorp International LLC, B-407762.3, 
    2012 WL 3475184
    , and NJVC, LLC, B-
    410035, 
    2014 WL 5358430
    , for support, in these cases, the GAO reached a conclusion
    adverse to protestor’s current argument. In Dyncorp International LLC, B-407762.3, the
    GAO found that the solicitation did not require a price realism analysis because nothing
    in the solicitation stated that the agency planned to evaluate proposed prices to determine
    whether they were so low that they reflected a lack of technical understanding, or that the
    agency could reject a proposal for offering unrealistically low prices. Also, in NJVC, LLC,
    B-410035, the GAO concluded that absent a clear indication in the solicitation that price
    would be considered in assessing technical understanding or performance risk under the
    technical and management factors, the agency was neither required to, nor permitted to,
    consider the technical and management factors through the lens of price.
    The current post-award bid protest is similar to the facts in Dyncorp International
    LLC, B-407762.3, and NJVC, LLC, B-410035, and distinguishable from the other cases
    cited by protestor and on which protestor relies, because the solicitations at issue in all of
    those cases contemplate a price realism analysis, and Section M.2.2. does not. As
    21 Also, in SecureNet Co. Ltd. v. United States, 
    72 Fed. Cl. 800
    , 812-13 (2006), the court
    found that a solicitation did not call for a price realism evaluation when the only reference
    to price realism in the solicitation was “defined in terms of whether the offer is too high,
    rather than too low.”
    45
    discussed above, Section M.2.2. does not state that the agency will review prices to
    determine whether an offeror understands the technical requirements or that a proposal
    can be rejected for offering a low price, and, in fact, M.2.2. does not refer to high or low
    prices at all. Instead, Section M.2.2. states that DHA could reject a proposal that was
    unrealistic in terms of program commitments, contract terms, and conditions. That Section
    M.2.2. explains that a proposal could be rejected if its program commitments, contract
    terms, and conditions are found to “reflect an inherent lack of competence or failure to
    comprehend the complexity and risks of the program,” is not sufficient to establish, under
    the factors identified in ViON Corp. v. United States, that DHA was implicitly committed
    to conducting a price realism analysis. Thus, protestor’s argument that Section M.2.2.
    required a price realism analysis fails to pass the test that protestor itself puts forth to
    support this bid protest.
    Additionally, when Section M.2.2. is read in the context of Section M in its entirety,
    protestor’s argument is unpersuasive. As explained above, Sections M.3-M.10 set forth,
    in detail, the evaluation factors and subfactors that DHA would use to evaluate the
    proposals, and DHA was required to follow the evaluation criteria set forth in conducting
    its evaluation. Immediately following Section M.2.2. in the solicitation was Section M.2.3.,
    which obligated DHA to evaluate whether the proposals demonstrated the offerors’
    understanding of the requirements, as well as the ability to fulfill the requirements, of the
    solicitation. In contrast to Section M.2.2., which stated that “[t]he Government may reject
    any proposal,” Section M.2.3. stated that “[t]he Government will evaluate the extent to
    which the proposal exhibits a clear understanding of the work requirements and the
    means required to fulfill the requirements.” (emphasis added). When read together,
    Sections M.2.2. and M.2.3. required DHA to evaluate whether proposals exhibited a clear
    understanding of the work requirements and an ability to meet those requirements, and
    granted DHA the discretion to reject a proposal that presented unrealistic “program
    commitments, contract terms and conditions” such that the proposal reflected a “lack of
    competence or failure to comprehend the complexity and risks of the program.”
    Additionally, as defendant and defendant-intervenors highlight, Section M.9 of the
    solicitation specifically explained in what context DHA would evaluate “FACTOR 3,
    PRICE/COST” of each proposal. Within Section M.9, Section M.9.4. indicated that “[t]he
    Government will perform a cost realism analysis/most probable cost evaluation, in
    accordance with FAR 15.404-1(d), on the Offeror’s proposed CLIN 9001 Transition-Out,
    estimated cost.”22 In Section M.9.6. the solicitation explained that “[t]he Government will
    evaluate the Offeror’s TEP [total evaluated price] for reasonableness. Line items will also
    22 A cost realism analysis, which is defined in FAR 15.404-1(d), is distinct from a price
    realism analysis, “a term not employed in the FAR.” DMS All-Star Joint Venture v. United
    States, 90 Fed. Cl. at 662-63 (explaining that “[c]ost realism is a technique that is applied
    to cost-reimbursement contracts” and price realism “examines the performance risk of
    proposals in a fixed-price contract procurement, with particular attention to the risk of low-
    priced proposals, and may include the cost realism analysis references in FAR 15.404-
    1(d)”).
    46
    be reviewed for unbalanced pricing.” Section M.9 did not include price realism language.23
    The plain language of Section M.2.2. explains its purpose and meaning, which was
    to grant DHA the authority to reject any proposals that the agency considered unrealistic
    due to “an inherent lack of competence or failure to comprehend” the program
    commitments, contract terms, and other conditions including the complexity and risks of
    the program, in light of the evaluation factors and subfactors delineated in Sections M.3-
    M.10. There is no requirement in Section M.2.2. for DHA to make a positive or negative
    finding as to the realism of the proposed PMPM prices and Guaranteed Network Provider
    discounts. Instead, the phrase “may reject” afforded DHA discretion to reject a proposal
    determined to be unrealistic based on the evaluation criteria described in the solicitation.
    See Mil-Mar Century Corp. v. United States, 111 Fed. Cl. at 542 (holding that an agency
    was not required to perform a realism analysis because the solicitation stated that the
    agency “may reject” a proposal that reflected a lack of realism). The solicitation did not,
    as protestor asserts, create an obligation to evaluate price realism.
    Based on an independent reading of the plain language of the solicitation, the court
    concludes that the solicitation did not require DHA to conduct a price realism analysis.
    Because the solicitation did not require a price realism analysis, DHA was not permitted
    to evaluate the realism of the offerors’ proposed prices because, if DHA had conducted
    a price realism analysis, it would have relied on unstated evaluation criteria. Because
    protestor’s price realism argument is its sole, remaining protest ground, protestor’s
    challenge of DHA’s decisions to award the East and West Region TRICARE contracts to
    Humana and Health Net fails.
    CONCLUSION
    For the reasons stated above, protestor’s motion for judgment on the
    administrative record is DENIED. Defendant and defendant-intervenors’ cross-motions
    for judgment on the administrative record are GRANTED. Having failed to succeed on
    the merits, protestor’s request for declaratory and injunctive relief is DENIED. The Clerk
    of the Court shall enter JUDGMENT consistent with this opinion.
    IT IS SO ORDERED.
    s/Marian Blank Horn
    MARIAN BLANK HORN
    Judge
    23 Additionally, as discussed above, Section L of the solicitation directed offerors to
    propose their PMPM prices and Guaranteed Network Provider discounts in their price
    proposals, and offerors were instructed not to address their price proposals in their
    technical proposals. Thus, the solicitation contemplated a clear separation between the
    evaluation of the technical and price proposals.
    47
    

Document Info

Docket Number: 16-1536

Judges: Marian Blank Horn

Filed Date: 7/10/2017

Precedential Status: Precedential

Modified Date: 7/10/2017

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