Plaintiff Utech Products d/b/a EndoSoft, LLC (“EndoSoft”) protests the actions of the Veterans Health Administration of the Department of Veteran Affairs (the “VA” or the “government”) in awarding a sole-source contract for a gastrointestinal electronic medical record software system to defendant-intervenor ProVation Medical, Inc. (“ProVation”). EndoSoft alleges that the VA inappropriately awarded the contract to ProVation without soliciting other offers and evaluating them through a competitive lens, requesting that this court declare that the VA’s decision was arbitrary, capricious, an abuse of discretion, and not in accordance with law. As relief, EndoSoft requests that this court enjoin the VA from taking further action on the contract, direct that the contract be terminated for convenience, award attorney’s fees and proposal preparation costs to EndoSoft, and grant any other relief the court deems appropriate…
After implementation of the EndoSoft system under the Four Points contract, several locations within Region 6 began to observe technical glitches in the software. On January 7, 2019, for instance, a nurse manager in Durham, North Carolina noted that a report was apparently deleted as if never entered after the completion of a procedure. See AR 5-59 to 60. She also reported that “patients we had checked in were systematically being deleted.” AR 5-59. She noted that she had reported the issue to “the software company last time” and “[t]hey told me they fixed the problem, but I don’t think it is fixed . . . because it happened again today.” AR 5-59. A nurse in Richmond, Virginia replied that there, too, they “[were] experiencing the same problems” and that she had “a nurse assigned to monitor this and other issues on a daily basis.” AR 5-59. The following day, VA notified Four Points and EndoSoft that “[t]he end users are still experiencing issues with patients getting deleted after EndoSoft told us recently this issue was resolved” and asked them to shed light on “what went wrong when the first fix was applied and how the next fix will be tested thoroughly for ensuring this problem truly gets resolved this time…”
On August 8, 2019, the VA posted on the federal business opportunities website—“for information purposes only,” AR 5-64—a notice of its intent to sole-source the contract, see AR 5-49; AR 5-61 to 64. The posting listed a series of five requirements, including “capab[ility] of migrating all data through the use of the EndoWorks [e]xport [t]ool,” and stated that because the needed services are “highly specialized” and “only available from a single source,” the VA “intends to award the contract with an effective date of September 1, 2019 to Pro[V]ation Medical.” AR 5-62. The next day, EndoSoft sent an email to Ms. Newman in “strong protest” of the sole source notice…
The J&A again enumerated the same eight EndoSoft inadequacies, concluding that “failure of the EndoSoft system to assure information accuracy results in errors which places the safety of our veterans at an unnecess[]ary and entirely avoidable risk.” AR 5-72. It also noted that ProVation offered a unique benefit because private sector academic medical affiliates at Duke University and Virginia Commonwealth University also use ProVation. See AR 5-71. Were Region 6 to implement ProVation, the J&A reasoned, it “will further facilitate more efficient care of [v]eterans since gastroenterology fellows and surgical residents rotating through the VA gastroenterology section are likely to have already been trained on ProVation MD at the academic affiliate.” AR 5-72. Implementing ProVation could thus prevent “inefficiencies both in terms of training and ongoing clinical care” as well as “risk of incomplete or inaccurate documentation in the medical record” caused by gastroenterology fellows and university physicians who “are often unfamiliar with [EndoSoft].” AR 5-71. Finally, the J&A again iterated that any GI EMR system Region 6 obtained must have “the capability of transferring data through the use of the EndoWorks [e]xport [t]ool” and only ProVation, because of its nearly exclusive authorization by Olympus, could do so…
This dispute hinges on whether the VA’s decision to disregard the requirements of competitive procurement by making a sole-source award to ProVation “involved a violation of a statute, regulation, or procedure.” Emery Worldwide, 264 F.3d at 1086. The court finds that it did…
For the reasons stated, the court finds the VA’s decision to forego the requirements of competitive procurement by making a sole-source award to ProVation to be unwarranted. Consequently, EndoSoft’s motion for judgment on the administrative record is GRANTED IN PART, and the government’s and ProVation’s cross-motions for judgment on the administrative record and to dismiss are DENIED.7 The court ENJOINS the VA from implementing the ProVation contract and orders that it be set aside. The clerk is directed to enter judgment accordingly.
