United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

DOCUMENT FOR PUBLIC RELEASE 

The decision issued on the date below was subject to a 

GAO Protective Order. This redacted version has been 

approved for public release. 

Decision 

Matter of: ViroMed Laboratories, Inc. 

File: B-310747.4 

Date: January 22, 2009 

David H. Laufman, Esq., Joanna Baden-Mayer, Esq., and Elizabeth C. Scanlan, Esq., 

Kelley Drye & Warren LLP, for the protester. 

Karen R. Harbaugh, Esq., and Robert E. Gregg, Esq., Squire, Sanders & Dempsey 

LLP, for the intervenor. 

Diane-Marie Carrero, Esq., Naval Supply Systems Command, for the agency. 

Eric M. Ransom, Esq., and Christine S. Melody, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision. 

DIGEST 

1. Consideration of innovations and/or creative approaches in proposals’ responses 

to solicitation requirements did not constitute reliance on an unstated evaluation 

criterion where solicitation provided for relative weighting of evaluation factors in 

the evaluation rather than review for acceptability alone. 

2. Protest that price/technical tradeoff was improperly based on price where 

technical factors were to be more important than price is denied where the record 

shows that the contracting officer reasonably determined that the price premium 

associated with the higher-rated proposal was not warranted, given the level of 

technical competence available at the lower price. 

3. Protest that the source selection decision failed to consider the full range of the 

protester’s technical capabilities is denied where the record shows that the 

contracting officer conducted a comprehensive review of the technical proposals 

that supported the stated evaluation conclusions. 

DECISION 

ViroMed Laboratories, Inc., of Minnetonka, Minnesota, the incumbent contractor, 

protests the award of a contract to Center for Disease Detection, LLC (CDD), of San 

Antonio, Texas, by the Department of the Navy under request for proposals (RFP) 

No. N00189-07-R-Z027, for HIV testing services. 
We deny the protest. 

The RFP, issued on April 18, 2007, called for the award of an indefinitedelivery/indefinite-quantity contract for HIV screening and confirmatory testing and 

other testing services on specimens provided by approximately 1,300 Navy activities 

and/or program blood donors worldwide. The RFP provided that award was to be 

made to the responsible offeror whose technical and price proposals represented the 

best value. RFP at 37. 

The evaluation of technical proposals was to be based on four technical factors: 

technical approach, corporate experience, past performance, and socio-economic 

plan. Id. The RFP provided that the technical factors would be more important than 

price, and that technical approach, corporate experience, and past performance 

would be of equal weight, but each significantly more important than socioeconomic plan. Id. 

Technical proposals were to be evaluated by a technical evaluation board (TEB) 

using an adjectival rating system consisting of four ratings: highly acceptable, 

acceptable, unacceptable (a), and unacceptable (b). Source Selection Plan (SSP), 

Enclosure 5, at 1. Unacceptable (a) referred to proposals containing deficiencies 

that were considered correctable through discussions, while unacceptable (b) 

referred to proposals containing deficiencies so substantial that they were 

considered not correctable through discussions. Id. 

Four proposals were received by the solicitation’s November 7, 2007, closing date. 

After an initial evaluation, the contracting officer determined that award could not 

be made on the basis of initial proposals.1 Source Selection Decision Memorandum 

(SSDM) at 2. As a result, the contracting officer decided to conduct discussions and 

established a competitive range consisting of CDD’s and ViroMed’s proposals.2

 

 

1

 ViroMed submitted the only technically acceptable initial proposal, which was rated 

highly acceptable. However, the contracting officer could not determine that 

ViroMed’s proposed price was fair and reasonable. In its comments, ViroMed 

protested the agency’s decision not to make an award on the basis of initial 

proposals where ViroMed’s submission was highly acceptable. We dismissed that 

protest because the decision whether to award on the basis of initial proposals is 

discretionary, and an offeror has no right to insist that award be made on that basis. 

See Kisco Co. Inc., B-216953, Mar. 22, 1985, 85-1 CPD ¶ 334 at 3. 

2

 Subsequent to the establishment of the competitive range, one of the offerors 

whose proposal was not included in the competitive range filed a protest with our 

Office. The agency agreed to include the proposal in the competitive range, 

rendering the protest academic. That offeror’s proposal was lower-rated and higherpriced than either CDD’s or ViroMed’s proposals, and is not relevant to the 

challenges presented in this protest. 

Page 2 B-310747.4 
Discussions with the offerors began on July 1, 2008, and the agency received final 

revised proposals from CDD and ViroMed on August 22. With regard to the final 

revised technical proposals, the TEB rated both proposals acceptable under the 

technical approach factor and highly acceptable under the corporate experience and 

past performance factors. Id. at 3. Under the socio-economic plan factor, the TEB 

rated CDD’s proposal highly acceptable and ViroMed’s proposal acceptable. Id. The 

TEB rated both proposals highly acceptable overall. Id. With regard to the final 

revised price proposals, CDD offered a total price of $36,889,449.50, while ViroMed 

offered a total price of $41,854,629. Id. 

The contracting officer reviewed the final revised proposals and the TEB’s technical 

ratings, and concurred with the TEB’s evaluation. As relevant here, the contracting 

officer noted under the technical approach factor that “both ViroMed and CDD 

submitted a revised Technical Approach that met all the requirements of the 

solicitation,” but that neither “offered innovations and/or creative approaches that 

were deemed beneficial.” SSDM at 7. In fact, the contracting officer stated, “the only 

excess that existed among each of the offeror’s revised Technical Approaches was 

their [College of American Pathologists (CAP)] accreditation, which resulted in an 

equivalent rating at the high end of acceptable.” Id. Under the corporate experience 

and past performance factors, the contracting officer recognized that both offerors’ 

proposals had exceeded the RFP requirements for corporate experience and 

demonstrated excellent past performance, warranting technical ratings of highly 

acceptable. Id. at 8. However, the contracting officer also noted that ViroMed had 

performed testing services virtually identical in scope and complexity to that 

required by the RFP, and had done so in volumes that exceeded the RFP 

requirements to a greater degree than had CDD. Id. at 4-5. With respect to the least 

important factor, socio-economic plan, the contracting officer considered CDD 

slightly superior on the basis of its status as a small business and [DELETED]. Id. at 

7-8. 

In the SSDM, the contracting officer concluded that, despite the offerors’ equal, 

highly acceptable overall ratings, ViroMed should be ranked first technically on the 

strength of its superior corporate experience and past performance, stating, 

“ViroMed’s highly rated, virtually identical Corporate Experience and Past 

Performance, coupled with its high [end] of Acceptable rating for Technical 

Approach, provides complete assurance . . . [guaranteeing] no impacts or delays in 

Naval operational and deployment tempos or schedules. . . .” SSDM at 8. However, 

the contracting officer also stated that CDD’s proposal “confidently demonstrate[s] 

that CDD can successfully complete the Navy’s large scale screening requirements 

. . . while sustaining health force protection and Naval operational and deployment 

readiness at all times.” Id. In reaching the award decision, the contracting officer 

stated that “[w]hile the RFP specified that the evaluation of proposals considers the 

offeror’s technical proposal more important than the offeror’s price proposal, the 

Contracting Officer has determined that the technical superiority of ViroMed’s 

proposal cannot be offset by the overall price differential of $4,965,179.50 or 13.46% 

Page 3 B-310747.4 
that exists between ViroMed and CDD,” id., and determined that the proposal 

submitted by CDD represented the most advantageous offer. 

The contracting officer made the award to CDD on October 2, and notified the 

unsuccessful offerors, including ViroMed, by letter. ViroMed then requested a 

debriefing, which the agency provided by telephone on October 9. This protest 

followed. In this protest ViroMed alleges that the agency improperly considered an 

unstated evaluation criterion in evaluating its proposal, and that the agency’s source 

selection decision was based improperly on price and failed to consider the technical 

benefits of the technology it proposed. 

With respect to the allegation that the agency improperly relied on an unstated 

evaluation criterion, ViroMed states that during its debriefing the agency informed it 

that, while its proposal met all requirements of the solicitation under the technical 

approach factor, it had not included any “innovations” or “excesses,” and therefore 

received an acceptable rather than highly acceptable rating for technical approach. 

ViroMed contends this represents an agency admission that it relied on “innovations” 

as a technical factor in its award determination and thereby violated the requirement 

that an agency identify all major evaluation factors in the solicitation. 

The agency responds that “innovations” was not an unstated evaluation criterion, but 

was properly included as an element of the TEB evaluation guidelines in the SSP. 

The TEB guidelines were used in assigning the adjectival ratings, which represented 

how well the evaluation criteria were met or exceeded by an offeror’s proposal. 

Specifically, the TEB guidelines for three of the four adjectival ratings--acceptable, 

unacceptable (a), and unacceptable (b)--concerned whether a proposal met some or 

all of the RFP requirements. SSP, Enclosure 5, at 1. On the other hand, the 

adjectival rating “highly acceptable” required more than simply meeting the RFP’s 

requirements. According to the TEB guidelines, a rating of “highly acceptable” was 

warranted where some or all of the following four criteria were met: 

(1) the proposal exceeds the solicitation requirements, and the 

excesses are beneficial to the Navy; (2) the proposal offers 

innovations and/or creative approaches that are beneficial to the 

Navy; (3) the proposal demonstrates a superior understanding of the 

solicitation requirements and/or; (4) the level or performance risk 

associated with the proposal is substantially less than the level 

expected from a competent offeror. 

Id. The agency argues that under the evaluation criteria included in the RFP, 

identifying “excesses,” creative and innovative approaches, and superior 

understanding of the requirements was a proper means of distinguishing between 

proposals that met the technical requirements and proposals that exceeded the 

technical requirements. 

Page 4 B-310747.4 
We agree. Where, as here, a solicitation indicates the relative weights of evaluation 

factors, as opposed to providing for selection of the lowest-priced, technically 

acceptable proposal, the agency is not limited to determining whether a proposal is 

merely technically acceptable; rather, proposals may be evaluated to distinguish 

their relative quality by considering the degree to which they exceed the minimum 

requirements or will better satisfy the agency’s needs. IAP World Servs., Inc., 

B-297084, Nov. 1, 2005, 2005 CPD ¶ 199 at 4. With specific regard to the 

consideration of “innovations and/or creative approaches” to distinguish the 

relative quality of proposals, we have held that an agency can properly consider 

both the extent to which proposals exceed the RFP requirements and the extent to 

which offerors used innovative measures to respond to those requirements. Id. 

Accordingly, under the circumstances here, the agency’s consideration of any 

“innovations” contained in a proposal’s response to the technical requirements does 

not amount to reliance on an unstated evaluation criterion. 

ViroMed next argues that the agency’s price/technical tradeoff was based improperly 

on price where the RFP indicated that technical proposals would be more important 

than price. Our review of price/technical tradeoff decisions is limited to determining 

whether the tradeoff was reasonable and consistent with the solicitation’s evaluation 

criteria. WorldTravelService, B-284155.3, Mar. 26, 2001, 2001 CPD ¶ 68 at 8. 

Notwithstanding a solicitation’s emphasis on technical merit, an agency may 

properly select a lower-priced, lower technically rated proposal if it decides that the 

cost premium involved in selecting a higher-rated, higher-priced proposal is not 

justified, given the acceptable level of technical competence available at the lower 

price. Id. 

The record in this case indicates that the contracting officer did not give undue 

weight to price in making the award decision. Rather, the record demonstrates that 

the contracting officer acted in accordance with the RFP’s direction that technical 

factors were more important than price, but concluded that CDD’s lower-priced, 

lower-rated proposal represented the best value to the government. As noted above, 

while CDD’s proposal was rated equal to ViroMed’s proposal under the technical 

approach, corporate experience, and past performance factors, and higher than 

ViroMed’s proposal in socio-economic plan, ViroMed in fact was ranked first 

technically on the basis of the contracting officer’s independent judgment that 

ViroMed’s corporate experience and past performance were superior to CDD’s, 

despite the equal, highly acceptable, technical ratings. SSDM at 4, 8. In making the 

selection decision, however, the contracting officer, after recognizing that “the RFP 

specified that the evaluation of proposals considers the offeror’s technical proposal 

more important than the offeror’s price proposal,” determined that “the technical 

superiority of ViroMed’s proposal cannot be offset by the overall price differential of 

$4,965,179.50 or 13.46% that exists between ViroMed and CDD.” SSDM at 8. Given 

that under the RFP here it was within the contracting officer’s discretion to decide 

that the price premium involved in selecting ViroMed’s higher-rated, higher-priced 

proposal was not justified in light of the acceptable level of technical competence 

Page 5 B-310747.4 
available at CDD’s lower price, we see no basis to conclude that the contracting 

officer’s decision here was inconsistent with the RFP or otherwise unreasonable. 

Finally, ViroMed asserts that the agency’s source selection decision was 

unreasonable because the record does not demonstrate that the contracting officer 

considered the full range of ViroMed’s technical capabilities in making the 

determination that its proposal was not worth the price premium over the CDD 

proposal. Specifically, ViroMed alleges that the agency’s source selection decision 

unreasonably failed to consider the technical benefits of its proposed testing system, 

including mitigation of false positive test results due to cross contamination, which 

ViroMed asserts is a concern associated with the highly sensitive HIV screening tests 

required by the solicitation. 

An agency need not address each and every feature of a proposal in documenting a 

source selection decision, but must show only that its evaluation conclusions are 

reasonably based. Houston Air, Inc., B-292382, Aug. 25, 2003, 2003 CPD ¶ 144 at 6. 

Here, the SSDM demonstrates that the contracting officer thoroughly and 

independently reviewed the offerors’ proposals, and made specific comparisons to 

differentiate between the two proposals. For example, under the corporate 

experience and past performance factors, the SSDM notes that ViroMed had 

performed testing services virtually identical in scope and complexity to that 

required by the RFP, and had done so in volumes that exceeded the RFP 

requirements to a greater degree than had CDD, which resulted in ViroMed being 

ranked first technically. SSDM at 4. Under the corporate experience and past 

performance factors, however, the contracting officer noted that: 

this greater magnitude or volume of testing in and of itself does not 

attribute to ViroMed’s technical superiority. With increasing 

automation, clinical laboratory testing has achieved greater scalability 

over the years. This is demonstrated by the fact that both ViroMed 

and CDD have exceeded the magnitude requirements of the 

solicitation . . . thereby demonstrating that both offerors possess the 

requisite instrumentation, personnel, management skills, pre/post 

analytical and quality assurance protocols, etc. to successfully 

perform the requirements of the solicitation. 

Id. (emphasis added). 

With regard to technical approach specifically, the technical approach factor under 

the RFP encompassed far more than an evaluation of each offeror’s proposed testing 

systems. In this regard, the SSDM demonstrates that in evaluating each offeror’s 

proposed technical approach, the contracting officer, consistent with the RFP and 

SSP, considered (1) how the offerors intended to maintain facilities, automated data 

processing services and data transmissions at the level of security required for 

Department of Defense networks; (2) how they intended to secure electronic data 

transfers using an approved encryption standard that meets federal security 

Page 6 B-310747.4 
Page 7 B-310747.4 

 

guidelines; (3) the specific technology and resources, and the extent of automation 

they proposed to meet the high volume testing requirements of the RFP; (4) how 

they intended to successfully accomplish the required shipping transportation 

services for specimens from locations both within and outside the United States; (5) 

the specific tests and test manufacturers they proposed to use to accomplish each 

test required by the solicitation; and (6) the labor mix and quantity of personnel they 

proposed to use to accomplish the requirements of the RFP. 

Concerning ViroMed’s specific allegation that the agency failed to consider the 

technical benefits of its proposed testing system, the record shows that the 

contracting officer did specifically discuss that testing system, [DELETED], in the 

SSDM. The contracting officer noted that [DELETED] would “provide the same 

quality control features and the same operating capabilities as currently in place, but 

would result in much more cost efficiencies.” SSDM at 6. However, after a detailed 

review of the six areas of each offeror’s technical approach, including each offeror’s 

proposed testing system, the contracting officer concluded that “the only excesses 

that existed among each of the offerors’ revised Technical Approaches was their 

CAP accreditation.” SSDM at 7. Contrary to ViroMed’s assertion that the contracting 

officer’s conclusion indicates a failure to consider the full range of ViroMed’s 

capabilities, the record shows that the contracting officer thoroughly reviewed the 

offerors’ technical approaches and concluded that of the technical features proposed 

by the two offerors, only the CAP accreditation exceeded the RFP requirements.3

 

In sum, the record in this case provides ample support for the agency’s evaluation 

conclusions, and demonstrates that the contracting officer’s selection decision, 

based on her determination that the benefits of ViroMed’s proposal above and 

beyond those benefits also offered by CDD’s proposal did not warrant the payment 

of the associated price premium, was reasonable. 

The protest is denied. 

Gary L. Kepplinger 

General Counsel 

3

 With regard to ViroMed’s specific example, our conclusion is reinforced by the fact 

that the contracting officer was clearly aware of the issue of higher false positive test 

result rates when using new, highly sensitive, HIV tests. This is demonstrated by the 

contracting officer’s discussion of the issue with CDD, due to the contracting 

officer’s concern that CDD may not have accounted for the costs associated with the 

increased sensitivity of the new HIV tests. Post-Negotiation Memorandum at 7. CDD 

responded that it had validated all of its testing instrumentation for the new tests 

required under the solicitation. Id.