GAO sends back a Defense Health Agency contract for a second opinion

The Defense Health Agency is being asked to reopen the competition for a contract to transform its business processes after the Government Accountability Office agreed with three protesters who felt they were treated unfairly.

Deloitte, Booz Allen Hamilton and Calibre all filed protests after DHA picked PricewaterhouseCoopers Public Sector as the winner of a contract to bring its operations up to the standards of a High Reliability Organization, a set of standards that govern health care operations.

The contract included services such as program management, strategic planning, communications and education, strategic business analysis, training development and information and knowledge management. The competition was best value evaluation.

Each of the protesters had slightly different complaints, according to the GAO decision, but each contended that the bids, including PwC’s, were unreasonably evaluated.

Calibre said that PwC was given credit for experience of its parent company. Deloitte said that PwC’s bid was unacceptable because it took exception to the data rights clause by limiting the government’s rights, contrary to what the solicitation required.

All three protesters argued that DHS failed to properly consider PwC’s labor mix and price.

GAO agreed will all of these points.

Calibre also argued that PwC had an organizational conflict of interest issue but GAO denied that part of the protest.

In its recommendation, GAO wants DHA to conduct discussions with the companies and ask for new bids, if appropriate. If the data rights clause is not important, then the agency should amend the solicitation and ask for new bids.

After doing all this, the agency should make a new award decision.

The part of the protest decision I found most interesting was the part where Calibre complained about PwC getting credit for its parent company’s corporate experience.

PwC said in its bid that it is a separate entity but receives “substantial support from its parent.” It said when its proposal referred to PwC, it was including both the public sector business and the commercial PwC U.S.

Calibre argued – and GAO agreed – that the substantial support from PwC U.S. didn’t allow the agency to assess whether PwC Public Sector should get credit for the corporate experience listed in the quotation.

GAO said that the bid didn’t explain how PwC Public Sector would work with PwC U.S. in a way that would demonstrate that the corporate experience attributed to PwC U.S. should count for PwC Public Sector.

Another area where the protesters won over GAO was the claim that DHA’s evaluation of the bids was unequal.

For example, DHA gave credit to PwC based on its client list, but not to Deloitte who apparently had a similar client list.

GAO found that DHA evaluated the labor mix differently for Booz Allen then for PwC. The agency claimed it didn’t have the same data on proposed hours and full-time-equivalents for Booz Allen but the information was there. “It is unclear why the … evaluator could not have conducted the same analysis,” GAO wrote.

So now the contract goes back to DHA, and given the information in the decision, there is plenty of insight into how the bidders – particularly PwC – can change their proposals.

In the end, a lost bid protest doesn’t necessarily mean a lost contract.