GAO Sustains Protest of Award For Testing Services for IT Systems

The Centers for Medicare and Medicaid Services’ award for IT testing was flawed because the agency didn’t consider the proposed relocation of personnel after the first year of performance, the Government Accountability Office (GAO) ruled (Tantus Techs. Inc., GAO, B-411608, 9/14/15, decision released 10/8/15).

The agency also failed to properly evaluate offerors’ corporate experience, past performance adn cost realism.  Therefore, the GAO recommended that the agency re-evaluate proposals and make a new source selection decision.

James G. Peyster Crowell & Moring LLP told Bloomberg BNA in an e-mail that, with regard to the personnel relocation issue, it was encouraging to see that the GAO applied what amounts to a tacit admission doctrine against the government, which didn’t respond to this challenge.

“While the government rightly receives the benefit of the doubt in many aspects of protest litigation, non-engagement should never be a viable litigation strategy,” he said.

Joshua D. Prentice of Dentons US LLP told Bloomberg BNA in an e-mail that regardless of the particular argument being advanced, protesters are most likely to prevail in protests if they focus on the agency’s evaluation process.

The protester succeeded here, he said, because it “showed the GAO specific process errors that were prejudicial to its proposal and proved that the agency failed to follow the stated evaluation criteria.”

The agency issued a request for proposals under a governmentwide acquisition contract for IT solutions and services as a small business set-aside.  It sought a contractor to test various IT systems that comprise the health insurance marketplace operated by the Department of Health and Human Services pursuant to the Affordable Care Act.

The award would be issued after a best value trade-off between cost and several non-cost evaluation factors.

Tantus Technologies Inc. protested the award to Edaptive Systems LLC on several grounds, inlcuding that the agency failed to consider the risk to staff retention posed by Edaptive’s personnel relocation plan.

Relocation Plan.  The GAO agreed that the agency failed to address the plan, which would relocate a substantial portion of Edaptive’s workforce.

The GAO also said that the agency didn’t consider the relevance of contracts it reviewed in assessing past performance, or adhere to solicitation criteria when assessing corporate experience.

On the past performance matter, Peyster said this decision “clarifies the requirement to limit the evaluation of past performance and corporate experience information to ‘relevant’ contracts, as defined by the solicitation, does not merely apply to past performance references submitted by offerors in their proposals, but also to an Agency’s use of government-wide past performance databases.”

The solicitation had directed offers to submit three or four examples of relevant experience, but also advised of the possibility of considering additional contracts in the Past Performance Information Retrieval System.

Finally, the agency’s evaluaton of Edaptive’s cost realism was flawed because the awardee proposed unrealistic labor rates for key personnel.  Edaptive’s plan to retain three key personnel while reducing their hourly rates should have raised concerns with the agency, the GAO stated.

David S. Cohen and others from Cohen Mohr LLP, Washington, D.C., represented the protester.  Jeffrey M. Chiow and others from Rogers Joseph O’Donnell PC, Washington, D.C., represented the intervenor-awardee.  Douglas Kornreich and Tony Ross of the Department of Health and Human Services represented the agency.  Susan A. Poling and others from the 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: Jeff Kinney in Washington at

The GAO’s decision is available at:

Reproduced with permission from Federal Contracts Report 104 FCR 1036, 10/13/15. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) <>


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