“In November 2017, NGS filed a pre-award protest with the Government Accountability Office (“GAO”), arguing that the Award Limitations Policy in the Jurisdiction 8 solicitation did not allow for full and open competition because it precludes a successful best value offeror from receiving a MAC award where the contract award would cause that offeror to exceed the Policy’s workload caps. GAO denied the protest in January 2018.”
“NGS then filed suit in the Claims Court on February 8, 2018. Before the Claims Court, NGS challenged the Jurisdiction 8 solicitation as well as the Jurisdiction H solicitation (which also included the Award Limitations Policy and remains at issue in this appeal). The Claims Court rejected NGS’s protest. NGS timely appealed.”
“This appeal requires us to analyze the propriety of the Award Limitations Policy included in the JH solicitation. As explained above, CMS developed the Policy to include in all MAC contract solicitations. It is not tailored to any solicitation. The rationale behind the Policy is two-fold. First, the agency has business continuity concerns related to overreliance on a particular MAC (i.e., that Medicare claims operations will be put at risk if a MAC with many contracts fails). Second, the agency has concerns about maintaining a competitive, dynamic MAC marketplace over the long term. The Award Limitations Policy attempted to address these concerns by setting workload caps so that a particular MAC cannot be awarded more than a certain percentage of the total A/B Medicare market.”
“As explained below, we reverse the Claims Court’s decision in this case. In doing so, however, we find it important to delineate the bounds of what we do—and do not—decide…”
“With this in mind, we turn to the specific arguments raised in this case. We first address whether the JH solicitation provided for full and open competition in light of the Award Limitations Policy contained therein. Because we hold that the JH solicitation did not provide for full and open competition, we then address whether the agency’s approach was otherwise permissible…”
“We now turn to whether the JH solicitation provides for full and open competition in light of the Award Limitations Policy included therein. We conclude it does not…”
“In short, the way the Policy effectively excludes offerors is wholly unlike the way certain requirements effectively excluded offerors in the cases cited by the government. Here, the exclusion is not based on some capability or experience requirement, but is instead based on the agency’s attempt to divvy up the MAC contracts in a way that ensures business continuity and helps maintain a competitive MAC market…”
“Having concluded that the Award Limitations Policy precludes full and open competition and effectively excludes certain offerors from competition, we next consider whether CMS’s actions can be otherwise justified…”
“In sum, the Award Limitations Policy precludes full and open competition by effectively excluding an offeror from winning an award, even if that offeror represents the best value to the government. And while agencies may consider market concerns and exclude a particular source for such reasons, the agency did not follow the congressionally designed procedure for doing so in this case.”
“As noted above, while we cannot uphold the procedure CMS used to address its concerns regarding overreliance and maintaining a competitive marketplace, we do not suggest that those concerns are improper or that they lacked a rational basis. Moreover, we do not suggest that the general methodology used by CMS, such as the particular market percentages employed, lacked a rational basis. Indeed, CMS may be able to rely in part on the same methodology to explain its rationale for excluding a particular offeror source under 41 U.S.C. § 3303(a) and FAR 6.202. Thus, although NGS has challenged the details of how the workload caps are structured as lacking a rational basis, we leave those issues to be addressed in a case in which CMS has followed the proper procedures to address its overarching market concerns.”
“For the foregoing reasons, we reverse the decision of the Court of Federal Claims and remand for further proceedings.” Source: USCourts.gov Read the full protest decision here.
