The following is an installment in Crowell & Moring’s Bid Protest Sustain of the Month Series.  In this series, Crowell’s Government Contracts Group will keep you up to date with a summary of one of the most notable bid protest sustain decisions each month.  Below, Crowell Consultant (and former GAO Bid Protest Hearing Officer) Cherie Owen discusses GAO’s decision sustaining the protest of Island Peer Review Organization, Inc., d/b/a IPRO.

In IPRO, the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) sought to award a task order for healthcare quality improvement services.  The first phase of the evaluation was a pass/fail quality improvement organization (QIO) eligibility assessment, which required the prime contractor to meet certain “prequalification criteria” that could only be demonstrated “on the merits and structure of their own organization.”  Reliance on the experience and qualifications of subcontractors was explicitly prohibited. 

The awardee, Superior Health, submitted a proposal explaining that it was an unpopulated joint venture comprised of eight entities.  The proposal indicated that Superior Health was relying on the experience and qualifications of these eight companies to meet the QIO eligibility requirements.  Other areas of Superior Health’s proposal referred to these eight companies as subcontractors.  For example, GAO noted that Superior Health’s business proposal included a “Master Subcontractor Agreement,” which indicated that the eight companies were acting as “independent part[ies]” and would “be considered a subcontractor for purpose[s] of this proposal.”  Similarly, Superior Health’s technical proposal identified key personnel and team members employed by these eight companies, stating that these individuals “were employed by subcontractors.”

IPRO argued that Superior Health should have failed the QIO eligibility assessment because it relied on the experience and qualifications of subcontractors to satisfy the QIO eligibility criteria, in violation of the solicitation’s terms.  In sustaining the protest, GAO stressed that its decision was “not meant to be read as saying that an unpopulated joint venture could not possibly submit a technically acceptable proposal under the terms of this solicitation.”  Rather, the contemporaneous record here failed to support the agency’s conclusions.  For example, GAO noted that there was no explanation of how CMS reconciled the language in Superior Health’s proposal identifying organizations as subcontractors with the solicitation’s prohibition on relying upon the experience and qualifications of subcontractors.  While the record (and CMS’ protest briefing) referenced various materials, it did not contain any discussion or analysis of the cited material. 

Moreover, CMS’ response to the protest claimed that the agency had also relied on other materials referenced nowhere in the contemporaneous record: Superior Health’s website, past experience with CMS, CPARS reports, and current contracts.  But, as GAO noted, the contemporaneous record failed to support those claims – as GAO put it, “none of these considerations are discussed in the TEP report under the QIO eligibility assessment or the SSD.”  Thus, to the extent the agency relied upon these additional considerations, this aspect of the evaluation was insufficiently documented.

The IPRO decision underscores the importance of carefully preparing proposals in accordance with solicitation requirements and proactively addressing any areas that may be seen as contradictory or ambiguous.  For agencies, the case highlights the critical need to contemporaneously document not only evaluators’ final determinations, but also the reasoning and analysis underlying those conclusions.  Finally, the decision illustrates the value of prompt and well-founded protests; in this instance, should CMS’s reevaluation ultimately find Superior Health ineligible, IPRO is poised for award as the sole remaining qualified offeror.