The Government Accountability Office has ruled that the Department of Health and Human Services wrongly awarded a $79 million contract to perform information services support for the Centers for Disease Control and Prevention.
The GAO found in favor of protestor Emergint Technologies Inc., represented by Pillsbury Winthrop Shaw Pittman counsel Daniel Herzfeld, and awarded attorney fees.
DB Consulting Group, Inc., which had originally been awarded the disputed five-year contract, was represented by Arnold & Porter partner David Metzger.
In an 11-page decision, GAO general counsel Lynn Gibson found that the contracting officer’s analysis of the proposed pricing was faulty. The concern was not that Emergint’s price was too high, but rather, too low – “significantly lower than the [government estimate],” which could indicate a lack of understanding of the work involved.
The officer also found that Emergint’s labor rates were “discounted to the point where they may have difficulty retaining incumbents or being able to successfully recruit highly qualified staff for those positions.”
Emergint argued this was unreasonable. The request for task order proposals issued by the agency didn’t say that the agency intended to perform a “price realism analysis. ” Such a notice would have alerted the company that submitting a low-ball bid “might be considered as reflecting on their understanding or ability to perform,” Gibson wrote.
Gibson also found the agency did not properly evaluate aspects of Emergint’s technical proposal.
Gibson ordered the agency to re-evaluate Emergint’s proposal and make a new decision based on price and technical trade-offs. If Emergint comes out ahead, she said the company should be awarded the contract and DB’s order should be terminated.
If Emergint doesn’t win the job, she found the agency should amend its request for task order proposals, indicate it will do a price realism analysis, allow everyone to submit new proposals and then make a new selection.
Herzfeld said he was “pleased with the result that GAO sustained the protest." He added that his client was "looking forward to the opportunity to compete on the reevaluation. Emergint knows that its prices are realistic, given that it currently is performing numerous task orders for CDC under this very contract vehicle - the CDC Information Management Systems contract - using the same price structure."
Metzger could not be immediately reached for comment.