GAO: Defense Health Agency Erred in $80 Million Program Support Award

The Defense Health Agency improperly relaxed key personnel requirements and engaged in unequal discussions with a protester before making an $80 million program management support award, the Government Accountability Office (GAO) said (Deloitte Consulting LLP, GAO, B-412125, 4/15/16, decision released 5/16/16).

The agency also failed to adequately document its past performance evaluation, the GAO said.

Shlomo D. Katz, counsel at Brown Rudnick LLP, told Bloomberg BNA that the decision made him wonder why the agency was trying so hard to award the contract to anyone but protester Deloitte Consulting LLP, but that’s the only explanation he coudl think of for such a “sloppy evaluation.”

“If this speculation is correct,” he said, “this decision may provide a road map for protesters whos cas is a little weak to try to prevail by making the agency’s evaluation look incompetent.”

The Defense Health Agency issued a request for proposals to support its governance, requirements and architecture management support (GRAMS) requirement, which provides program management support to requirement managers in the agency’s Health Information Technology Directorate.

The request for proposals said the agency would award the contract on a best-value basis after evaluating offerors’ technical, past performance, small business participation and price factors.

Evaluators concluded that Data Networks Corporation’s technical superiority in its nearly $80 million proposal earned it the award.  Deloitte Consulting LLP challenged the award on several grounds.

Key Personnel Requirements Relaxed.  The GAO disagreed with Deloitte that an organizational conflict of interest disqualified Data Networks, but agreed that the agency improperly relaxed key personnel requirements in the solicitation.

Specifically, the GAO said Data Networks’ proposed senior information architecture fell short of the five years of experience listed in the solicitation.

The GAO said it couldn’t conclude from the record that the agency relaxed personnel requirements on an equivalent basis.

The GAO also sustained Deloitte’s challenge to the agency’s past performance evaluation, concluding that the agency didn’t properly document its review of offerors’ past performance references.

Finally, the GAO said the agency engaged in unequal discussions by informing Data Networks about specific ratings for past performance references but not Deloitte.

David S. Cohen and others from Cohen Mohr LLP, Washington, represented the protester.  Thomas K. David and others from David, Brody & Dondershine LLP, Reston, Va., represented the intervenor-awardee.  David R. Smith and Randy Stone represented the Defense Health Agency.  Susan A. Poling and others from Office of the General Counsel, GAO, participated in the preparation of the decision.

By Daniel Seiden

To contact the reporter on this story: Daniel Seiden in Washington at

To contact the editor responsible for this story: Seth Stern at

Reproduced with permission from Federal Contracts Report 105 FCR 478, 5/24/16. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) <>

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