Court of Federal Claims Posts Decision: Protest Denial of $65B Defense Health Agency Health Care Services award

Plaintiff Health Net Federal Services, LLC (“Health Net”) brings this post-award bid protest challenging the Defense Health Agency’s (DHA) award of a firm-fixed price contract providing health care services to defendant-intervenor TriWest Healthcare Alliance Corporation (“TriWest”).  Health Net alleges the $65,000,000,000 contract award was flawed because DHA overlooked TriWest’s material misrepresentations, followed incorrect methodology regarding subcontracting, and did not adhere to the Solicitation’s standards.

Health Net filed its first GAO protest in January 2023 alleging TriWest improperly calculated its small business participation.  DHA took voluntary corrective action, reevaluating TriWest’s small business participation factor, and reopening discussions with TriWest and Health Net.  After reviewing TriWest’s revised proposal and deeming it acceptable, DHA reawarded the contract to TriWest in April 2023.  Health Net then unsuccessfully filed a second GAO protest challenging the re-award to TriWest.  Health Net now protests DHA’s decision to award the contract to TriWest after corrective action, alleging TriWest made material misrepresentations and DHA made an erroneous responsibility determination and arbitrarily and capriciously evaluated TriWest’s revised proposal.

After filing its Complaint, plaintiff filed a Motion for Discovery and Supplementation of the Administrative Record in support of its material misrepresentation claims.  Plaintiff argued the omission of certain documents related to TriWest’s subcontractors’ corporate structure would prevent effective judicial review of its allegations.  The Court denied these Motions in a 29-page order on 29 September 2023.  Health Net Fed. Servs., LLC v. United States, 168 Fed. Cl. 1 (2023).  The Court determined DHA considered the issues raised by plaintiff during corrective action and reviewed the information and documentation it deemed sufficient to make an award decision.  The Court therefore found the Administrative Record was sufficiently complete for judicial review and denied plaintiff’s Motion to Supplement.  After the Court issued the September 2023 Order, plaintiff then filed its Motion for Judgment on the Administrative Record.  The government and TriWest filed cross-motions for judgment on the administrative record…

Finding no relief from its first two protest attempts, plaintiff filed suit in this Court on 8 August 2023.  See Compl.  Concurrently with its Complaint, plaintiff submitted:  (1) a motion for leave to file under seal, ECF No. 3; and (2) a motion for a protective order, ECF No. 4.  Defendant-intervenor filed its Unopposed Motion to Intervene on 9 August 2023, ECF No. 10.  On 10 August 2023, the Court granted defendant-intervenor’s Motion to Intervene and scheduled an initial status conference, ECF No. 12.  On 11 August 2023, the parties filed a joint status report, ECF No. 13, proposing a schedule for proceedings in this case and informing the Court of defendants’ positions on plaintiff’s pending motions.   On 22 August 2023, plaintiff filed its Motion for Discovery and Supplementation of the Administrative Record (“First Mot. for Disc. and Suppl.”), ECF No. 30.  On 28 August 2023, plaintiff filed a Supplemental Motion for Discovery and Supplementation of the Administrative Record (“Second Mot. for Disc. and Suppl.”), ECF No. 32.  On 1 September 2023, TriWest filed its Opposition to Plaintiff’s Motions for Discovery and Supplementation of the Administrative Record (“TriWest’s Resp.”), ECF No. 41.  The government, also on 1 September 2023, filed a response to plaintiff’s motions (“Gov’t’s Resp.”), ECF No. 42.  On 7 September 2023, plaintiff filed a reply in support of its Motion for Discovery and Supplementation of the Administrative Record (“Pl.’s Reply”), ECF No. 43…

Plaintiff argues it “is entitled to injunctive relief setting aside the award to TriWest and (1) requiring DHA to reopen its evaluation and award decision in accordance with law, regulation, and the Solicitation and (2) enjoin TriWest’s further participation in this procurement.”  Pl.’s MJAR at 48.  Plaintiff reasons “HNFS clearly faces irreparable harm absent a permanent injunction, because a permanent injunction is the only remedy for DHA depriving HNFS of a fair opportunity to compete under the Solicitation.”  Id. at 49.  “Absent injunctive relief,” plaintiff argues, “[Health Net] will lose a significant opportunity to compete for the chance to continue serving TRICARE beneficiaries.”  Id.  The government responds:  “[T]he Court could remand to DHA with instructions to re-evaluate TriWest’s proposal in accordance with the Court’s opinion. . . .  [I]f the Court were to determine that DHA committed a prejudicial error by failing to reasonably evaluate TriWest’s small business subcontracting plan.”  Gov’t’s Cross-MJAR at 57…

For the foregoing reasons, the Court (1) DENIES plaintiff Health Net’s Motion for Judgment on the Administrative Record, ECF No. 58; (2) GRANTS the government’s CrossMotion for Judgment on the Administrative Record, ECF No. 61; and (3) GRANTS TriWest’s Cross-Motion for Judgment on the Administrative Record, ECF No. 62.  The Clerk is directed to enter judgment accordingly.

See the decision here.

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