Maximus weighs next steps after CMS bid protest decision

The now-public version of the Government Accountability Office's decision involving a dispute between Maximus and the Centers for Medicare and Medicaid Services does not end their impasse.

In fact, Maximus is indicating that it is seriously considering whether to file a lawsuit at the U.S. Court of Federal Claims.

Maximus filed its protest with GAO in June after CMS declined to exercise an option on the $6.6 billion Contact Center Operations contract. CMS launched a recompete with a solicitation that included requirements for a labor harmony agreement.

GAO has agreed with Maximus that portions of the requirement were ambiguous, but the watchdog agency sided with CMS on other points. GAO denied Maximus' arguments that the inclusion of the provision violated Federal Acquisition Regulations and that including the provision restricted competition.

But in its initial statement and the redacted decision released Tuesday, GAO has also dismissed several Maximus arguments about whether including the labor harmony agreement in a solicitation violated the Labor Management Relations Act and the National Labor Relations Act.

GAO said that because those laws do not govern procurement, it doesn’t have jurisdiction.

“Maximus appreciates GAO recommending that the agency undergo corrective action on the ambiguity around the labor harmony requirement, however we disagree with their decision to deny or fail to consider our other meaningful arguments. We believe that all our legal arguments are meritorious and deserve due consideration,” the company said in a statement sent through a spokesperson.

“We will continue to explore all options to challenge this decision including taking our case to the U.S. Court of Federal Claims to ensure that the interests of our workforce and the beneficiaries we serve are protected,” the statement read.

The dismissed portion of the protest falls squarely under that court’s jurisdiction because of GAO’s position that those labor laws are not in its authority. But Maximus can include its other challenges as well because going to the court is not an appeal of the GAO decision, but a new protest all together.

GAO's decision includes several new pieces of information, including how CMS negotiated with Maximus to add the labor harmony agreement to the contract as part of securing the next option.

After they couldn’t reach an agreement, CMS decided to not exercise the option and began the recompete process.

One way CMS justified the request for the labor harmony agreement were “several job actions,” as the agency calls them, against Maximus.

Those occurred at Maximus call center facilities in Louisiana, Mississippi, Kentucky, and Virginia. There also was a rally outside of the Health and Human Services headquarters.

While the rallies and demonstrations didn’t disrupt services, CMS saw them as a potential risk and pursued the amendment to the contract.

One of Maximus’ arguments is that the labor laws require the federal government to remain impartial and CMS did not remain impartial by making a labor harmony agreement a requirement.

CMS' counterargument is that the provision in the labor law only applied to active labor disputes. In the agency's eyes, it didn't apply to the Maximus case because there was no active dispute.

GAO agreed with CMS on how the labor harmony agreement requirement didn’t stipulate an outcome, such as wage rates or employer concessions.

“The LHA clause only requires that the employer and labor organization reach an agreement not to disrupt the agency’s acquisition of the CCO support services,” GAO wrote.

Maximus' statement doesn’t give an indication of a timeline for when the company will decide on next steps. Generally, these moves occur within weeks.

Follow this link to read GAO's entire decision.

Below is Maximus’ statement in its entirety:

Maximus appreciates GAO recommending that the agency undergo corrective action on the ambiguity around the labor harmony requirement, however we disagree with their decision to deny or fail to consider our other meaningful arguments. We believe that all our legal arguments are meritorious and deserve due consideration. 

Maximus employees have consistently demonstrated their ability to manage this critical contract successfully, providing essential support to millions of Americans who rely on Medicare and the Federal Healthcare Exchange. Our employees have exceeded quality standards, achieved historically high customer service ratings, and maintained uninterrupted performance.

The baseless rebid not only undermines the proven value our employees bring to CMS but also fails to recognize the hard work and dedication of our employees, who have demonstrated unwavering commitment and expertise.

Maximus remains committed to fighting for what we believe is right, both for our employees and the integrity of the procurement process. We will continue to explore all options to challenge this decision including taking our case to the U.S. Court of Federal Claims to ensure that the interests of our workforce and the beneficiaries we serve are protected. Our goal has always been to provide the highest level of service to the American public, and we will not waver in that commitment.