Government Contracts Solicitation Precluded Full and Open Competition
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Monday, June 17, 2019

Solicitation Precluded Full and Open Competition

By Government Contracts Editorial Staff

The denial of a protest of the terms of a solicitation for Medicare administrative contractor services was reversed and remanded by the Court of Appeals for the Federal Circuit because the solicitation’s award limitations policy precluded full and open competition. The government divided the nationwide MAC contract market into 12 geographic jurisdictions. The government had business continuity concerns related to overreliance on a particular MAC and desired a long-term competitive, dynamic MAC marketplace, so it included in the solicitation for one region the ALP, which provided in part that a contractor would not be awarded more than 26 percent of the national MAC workload. The protester was the incumbent for two jurisdictions and held 19.8 percent of the national workload, and an award under the challenged solicitation, which represented 13.5 percent of the national workload, would cause it to exceed the ALP caps.

Ability to Submit Proposal Irrelevant. On appeal from the Court of Federal Claims (62 CCF ¶81,386), the government contended the solicitation met the Competition in Contracting Act requirement for full and open competition (41 USC 3301(a)(1)) because an offeror that would exceed the workload caps could still submit a proposal. The Federal Circuit rejected this argument because it placed too much significance on the word “submit,” and submitting an offer could be entirely futile. Under the ALP, a responsible offeror that would exceed the workload caps is not given the same opportunity to win an award as other offerors that submitted awardable proposals. The fact that an offeror that would exceed the caps was able to submit a proposal did nothing to address this concern.

Not Evaluation Criteria. The government also maintained the workload caps were mere evaluation criteria and “solicitation terms that result in particular offerors being unable to win an award based upon their particular circumstances do not violate CICA’s competition requirements, so long as the terms have a rational basis in light of the [government’s] needs.” However, it was doubtful the ALP constituted an evaluation factor, and the precedent cited by the government was distinguishable because the way the ALP effectively excluded offerors was “wholly unlike” how the requirements in those cases effectively excluded offerors. In this case, the exclusion was based on the government’s attempt to divvy up the MAC contracts in a way that ensured business continuity and helped maintain a competitive MAC market, not on a capability or experience requirement. (FMS Investment Corp., et al. v. U.S., CA-FC, 63 CCF ¶81,659)

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