PROTEST: HHS Seeing Stars After Recent Loss in COFC Bid Protest

** Updated 4.20.17 **

Court of Federal Claims Awards Enhanced Attorney Fees In Protest Following “Egregious” Agency Conduct, Wednesday, April 19, 2017, The National Law Review –- Authors: Hoe, Vohra, and Benson

“Last year, we highlighted the Court of Federal Claims’ (“COFC”) decision in Starry Associates, Inc. v. United States, 127 Fed. Cl. 539 (2016), which sharply criticized a Department of Health and Human Services (“HHS”) decision to cancel a solicitation, a rare rebuke in an area where agencies enjoy considerable deference from the courts. The Court’s decision noted the unique circumstances of that case—a series of agency actions resulting in the cancelation of the solicitation at issue that the Court characterized as “capricious” and “reflect[ing] a lack of fidelity to the procurement process.” That cancelation resulted in multiple GAO protests, a hearing at GAO, multiple depositions of agency officials during a follow-on protest at the Court, and a decision enjoining HHS from cancelling the solicitation (raising the interesting question of whether HHS must now award the contract to Starry Associates). In a subsequent decision issued in the case last week, Starry Associates, Inc. v. United States, No. 16-44C (Fed. Cl. Mar. 31, 2017), the case’s exceptional nature was further demonstrated by the COFC’s decision to award “enhanced” attorney fees to plaintiff’s counsel.

After successfully challenging HHS’s cancellation of a solicitation for…”…

G2X TAKE: This hard line ruling by the COFC can serve as some vindication for this WOSB after a two-year hard fought battle, though we suspect the final contract award is the preferable resolution.

Stating that “what the agency did here constitutes an egregious example of intransigence and deception, not just with regard to the bidder, but to the GAO and to the court” is the type of ruling that no procurement office wants to be involved in.

No news yet as to how this impacts Starry Associates prospects for receiving the prime award for this task to provide IT operations support and services to PSC for UFMS.

** Updated 8.9.16 **

HHS Seeing Stars After Recent Loss in COFC Bid Protest -– August 3, 2016, By Kayleigh Scalzo and Anuj Vohra,

In Starry Associates, Inc. v. United States, No. 16-44C (Fed. Cl. July 27, 2016), the Court of Federal Claims (“COFC”) sharply criticized a Department of Health and Human Services (“HHS”) decision to cancel a solicitation following two bid protests at the Government Accountability Office (“GAO”). The history and outcome of the case are exceptional among bid protests — an area of the law characterized by deference to agency decisions and arbitrary-and-capricious review.

HHS’s Program Support Center (“PSC”) issued a lowest-price, technically acceptable solicitation to procure business-operations services in support of HHS’s financial management system. Protestor Starry Associates, Inc. was the incumbent, but Intellizant, LLC won the award as the lowest-price offeror. Starry ended up filing three protests at GAO and the instant protest at the COFC, alleging that the procurement process was “tainted” in favor of Intellizant. Protests accusing the agency of bias rarely prevail, but the COFC’s decision laid out in detail “a series of actions which,” by the court’s description, “reflect a lack of fidelity to the procurement process.” And while the court declined to formally determine whether the procurement was tainted by bias, it functionally ended up in the same place……

G2X TAKE: After “[t]hree protests at GAO, two corrective actions, and one law suit” the final resolution remains unclear, but with the HHS PSC Division Manager and two others barred from participating “in any subsequent agency actions regarding this solicitation”, hope of a positive result remains for incumbent, Starry Associates. This is a nicely written and succinct article that highlights the set of improper actions taken by an HHS PSC leader and the long, extensive and costly protest steps this firm has been forced to take along the way.

**Update – January 6, 2016 **

PROTEST DECISION: Protest of $15.2M HHS PSC dismissed… For now

Starry Associates, Inc., a small business, of Annapolis, Maryland, protests the cancellation of request for quotations (RFQ) No. 15?233-SOL-00023 issued by the Department of Health and Human Services (HHS), for information technology (IT) business operations support services. Starry argues that the agency’s cancellation lacks a reasonable basis and was a pretext to avoid implementing a prior decision by our Office, which the protester alleges would have resulted in an award to Starry…

The full GAO report can be found here.

G2X TAKE: More than a year since the original protest was levied on this contract to provide IT Operations Support Services to PSC, this contracted battle may be over – for now that is. The details provide a glimpse into the messy and poorly executed solicitation, including an admission that “two of the three systems proposed to be supported under the instant procurement were included in the solicitation by error”.

The nitty gritty details of these reports do provide great insight into a solicitation, but the key takeaway here is that the solicitation was cancelled and will be re?solicited in Fiscal Year 2016. The incumbent and protestor, Starry, will continue supporting this program until the new contract is awarded.

** Posted 9.24.15 **

G2X TAKE: More than 10 months since the original award of this $15.2M/4 year contract to provide IT Business Operations Support Services in support of HHS PSC, yet another challenge has been put forth by protestor Starry Associates. While the rationale for the latest challenge posted on September 15th has not been revealed yet, the GAO did agree with a key argument made by Starry as part of ruling that was handed down last month. As this PubKGroup article points out, “the GAO found that HHS’s evaluation was unreasonable and inconsistent with the terms of its solicitation, because only five of 17 individuals proposed by Intellizant for the work were current employees, and Intellizant’s bid failed to include letters of commitment or otherwise show its ability to provide the personnel necessary to meet the solicitation’s requirements.”

The full GAO ruling report is listed here. The important thing to note here is that the argument by Starry carried water where most don’t – something to consider when providing resumes and commitment letters as required by a solicitation. While it may not be the case here, this can be especially tricky when trying to flip badges.

Starry Associates has a history of supporting HHS Program Service Center in the implementation and operation of the Department-wide Unified Financial Management System.


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