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The government buys billions of dollars in healthcare-related goods and services every year, and no government procurement is perfect. In a business where every contract award matters, healthcare contractors should be aware that they may have a second chance at winning a contract if the government agency made a material error in its procurement process. The question disappointed healthcare contractors should ask is whether the agency acted unreasonably in its evaluation and selection of the awardee. If the answer is “yes”—or even “maybe”—healthcare companies may file a bid protest at the Government Accountability Office (“GAO”) or the U.S. Court of Federal Claims (“COFC”) challenging the award. If successful, the agency will often need to reevaluate proposals and make a new award, giving protestors another opportunity to be selected.

Protestors have alleged many flaws in healthcare-related procurements over the years, but not all of those flaws are sufficient for GAO or the COFC to send the government back to try again. So which arguments do win bid protests of healthcare-related contract awards? Here are a few winning arguments from recent case law that healthcare contractors might consider next time they lose out on a contract:

  • The agency did not evaluate proposals according to the solicitation’s stated evaluation criteria. The solicitation informs prospective bidders of what the agency will look for and consider in their proposals, as well as how the agency will weigh elements of the proposals. When an agency deviates from the solicitation’s stated evaluation plan, this is a powerful ground for protest. For example, in Spectrum Healthcare Resources, Inc., B-421325, 2023 CPD ¶ 74 (Mar. 2023), the protestor challenged a contract award by the Federal Emergency Management Agency for medical and behavioral health services. The solicitation contemplated a two-phase evaluation process with separate evaluation factors for “technical capability,” which asked offerors to detail prior relevant experience, and “staffing and management approach,” which instructed offerors to describe their approach to performing the work. In its evaluation of “technical capability,” the agency assigned the protestor’s proposal several weaknesses for failing to explain how it planned to meet the requirements of the solicitation. Spectrum protested, arguing that the agency had conflated the “technical capability” and “staffing and management approach” factors. GAO agreed and found that the solicitation required that the agency assess offerors’ ability to meet the requirements of the contract and approach to performing the work under the “staffing and management approach” factor, not the “technical capability” factor. Because the agency did not evaluate Spectrum’s proposal in accordance with the solicitation, GAO recommended the agency reevaluate Spectrum’s proposal and make a new award decision. See also Onesource PCS, LLC, B-419222, 2021 WL 131280 (Jan. 2021) (protest against Air Force contract award for photorefractive keratectomy personal and non-personal services sustained where agency did not evaluate the relevance of offeror’s past performance as required by the solicitation); Ohio KePRO, Inc., B-417836, 2020 CPD ¶ 47 (Nov. 2019) (protest against Center for Medicare & Medicaid Services (“CMS”) contract award for beneficiary oversight and claim review services sustained because agency failed to evaluate cost realism, level of effort, and relevance of past performance as required by the solicitation).
  • The agency engaged in unequal or not meaningful discussions with offerors. When an agency is evaluating proposals, it may contact offerors to ask questions about their proposals. Depending on the nature of the communications, they can be considered “clarifications” or “discussions.” If an agency holds discussions with one offeror, it must conduct meaningful discussions with all offerors in the competitive range, i.e., it must alert all offerors to deficiencies in their proposals so that they may have an opportunity to correct them. If an agency fails to make its discussions meaningful, or to give all offerors the same opportunity to correct their proposals, GAO or the COFC may sustain a bid protest. In Ohio KePRO, Inc., B-417836.4, 2021 CPD ¶ 325 (Nov. 2020) the protestor challenged a CMS contract award for beneficiary oversight and claim review services. Following the receipt of final proposals, the agency reached out to the awardee to request pricing information that was missing from its proposal and allowed the awardee to supplement its proposal. The agency did not contact the protestor, alert it of any deficiencies in its proposal, or allow it to correct such deficiencies. The protestor argued to GAO that this constituted unequal discussions with the offerors. GAO sustained the protest and recommended that the agency reopen discussions and allow offerors to resubmit their proposals. See also Rice Solutions, LLC, B-420475, 2022 CPD ¶ 102 (Apr. 2022) (protest of Indian Health Service contract award for certified registered nurse anesthetist services sustained because agency failed to conduct discussions with all offerors in the competitive range); GOV National Healthcare Drive, LLC, B-419258, 2021 CPD ¶ 25 (Jan. 2021) (protest of Department of Veterans Affairs (“VA”) award of lease of premises to be used for a community-based outpatient clinic sustained where agency engaged in discussions with offerors, but did not alert protestor to deficiencies or weaknesses in its proposal).
  • The agency disparately treated of offerors. Sometimes it seems like an agency has chosen its preferred contractor before even reviewing the proposals, and its evaluation can reflect these biases. Where the agency assigns different ratings to two substantively similar proposals or elements of proposals, this is grounds for protest that will often win the day. One example is Marquis Solutions LLC, B-419891, 2021 CPD ¶ 316 (Sept. 2021), a protest of a VA contract for medical courier services. The protestor argued that the agency had disparately evaluated aspects of its proposal that were similar to the awardee’s proposal. For example, both offerors proposed to start performance immediately with fully trained staff, and both offerors were recent incumbents who could do so. Yet the agency assigned the awardee several significant strengths for this aspect of its proposal, and no strengths to the protestor. Further, both offerors appeared to have copied and pasted some language from the solicitation into their proposals, but the agency criticized only the protestor for this flaw. GAO held that the agency failed to treat offerors fairly and equally and recommended that it reevaluate proposals and make a new source selection decision.
  • The awardee was not eligible for award. Every now and then, a corporate restructuring or acquisition renders a company ineligible to receive a contract that they otherwise could have won. These are technicalities that only a savvy protestor could spot. In Softrams LLC, B- 419927.4, et al., 2022 CPD ¶ 57 (May 2022), CMS awarded a General Services Administration Federal Supply Schedule Order for operations and management of CMS’s identity management system through a two-phase evaluation process. The awardee submitted the first phase of its proposal as a prime vendor and specified use of a particular subcontractor. Prior to submitting its phase two proposal, the prime vendor and subcontractor entered a Contractor Teaming Arrangement and then submitted their phase two proposal as team members. GAO found that it was unreasonable for CMS to accept a proposal effectively submitted by two different entities and sustained the protest. See also ASRC Federal Data Network Technologies, LLC, B-418028, 2019 CPD ¶ 432 (Dec. 2019) (protest against Defense Health Agency small business innovation research contract award sustained where awardee acquired entity that would have been eligible for contract award, but GAO found that being successor in interest was insufficient to make awardee eligible for award under Small Business Innovation Research Policy Directive).

Although government contracts for healthcare supplies and services present special compliance concerns that most government contractors do not face, the procurement process and pitfalls are largely the same across government contracting. Thus, in bid protests, the same arguments prevail whether the government is contracting for medical devices or jet engines. The keys to a successful protest are vigilant monitoring of procurements, close attention to debriefings, knowing your competitors, and engaging counsel who have years of experience. Sheppard Mullin has deep bid protest expertise and can help you decide whether a bid protest might help your company win its next healthcare contract with the government.