Court of Federal Claims Decision released: Protest denial of VA Electronic Data Interchange and Paper-to-Electronic support services requirement Opinion and Order

In this consolidated post-award bid protest, Plaintiffs SSI Claimsnet, LLC (“SSI”) and Availity, LLC (“Availity”) contend that the U.S. Department of Veterans Affairs (“VA”) improperly awarded a contract for Electronic Data Interchange (“EDI”) and Paper-to-Electronic (“P2E”) support services to Defendant-Intervenor Change Healthcare Operations, LLC (“Change”).  Specifically, SSI alleges that the VA’s evaluation of its technical proposal, as well as the VA’s best value determination, were flawed.  Availity alleges that the VA erred in its technical analysis and price analysis.  As explained below, the Court DENIES SSI’s and Availity’s Motions to Supplement the Administrative Record, DENIES SSI’s and Availity’s Second Motions for Judgment on the Administrative Record, and GRANTS the Government’s and Change’s CrossMotions for Judgment on the Administrative Record….

The Evaluation and Award

The VA received timely proposals from four offerors, including SSI, Availity, and Change.  AR 882.  On March 27, 2023, a Technical Evaluation Panel (“Panel”) issued its initial evaluation of the offerors’ technical proposals.  AR 864–69.  The Panel rated SSI’s and Availity’s proposals as “Unacceptable.”  AR 864–65, 868–69.  Change received a rating of “Excellent” for its technical proposal.

Regarding SSI, the Panel identified one strength and one weakness in SSI’s technical proposal.  AR 868–69.  For the Technical Approach sub-factor (1A), the Panel awarded a strength to SSI for its “Services and Deliverables,” but identified a weakness in SSI’s CAQH CORE response times.  AR 868.  The Panel explained: SSI stated on page 6 of their proposal that their direct “…real time solution consistently generates response times 10-15x faster than the CAQH CORE response limitation standard of 20 seconds” and their “hosted real time solution generates response times 20-30x faster than the CAQH CORE response limitation standard of 20 seconds”.  VA does not find this feasible as that implies a transaction timeframe of approximately two seconds, which SSI cannot control the provider or VA system response times.  VA considers this a weakness in SSI’s understanding of this requirement. Id.  The Panel also noted that SSI did not propose a solution to the requirement in PWS Section 5.5 for transition out services, which the VA considered a deficiency.  Id.   The Panel determined that Availity’s proposal had two weaknesses and one deficiency.  The Panel assessed a weakness based on Availity’s failure to explain how it would meet the Payer Identifier requirement in PWS Section 5.2.10.  AR 864.  The Panel similarly assessed a weakness based on Availity’s failure to explain how it would meet the hosting requirement.  Id.  Finally, like SSI, the Panel noted that Availity did not propose a solution to the requirements in PWS Section 5.5 for transition out services, which the VA considered a deficiency…

Discussion

Plaintiffs’ Motions to Supplement the Administrative Record are Denied. Plaintiffs’ motions to supplement seek to add documents to the Administrative Record related to an earlier solicitation for similar services, Solicitation 0003, which was protested and subsequently cancelled.  See ECF No. 36 at 4; ECF No. 41 at 4–5; see also Def.’s Resp. to SSI’s Mot. to Suppl. Admin. R. at 2, ECF No. 38 (explaining that Solicitation 0003 was cancelled after a series of bid protests).  Plaintiffs contend that these documents support their challenges to the VA’s award decision in this case.  SSI argues that the VA’s assessment of its technical proposal for the instant Solicitation was inconsistent with the VA’s assessment of SSI’s technical proposal for Solicitation 0003.  ECF No. 36 at 10–11.  Similarly, Availity argues that the VA’s price analysis for the instant Solicitation was inconsistent with the VA’s price analysis for Solicitation 0003.  ECF No. 41 at 9–10.  Plaintiffs contend that because the two solicitations are effectively the same procurement, these inconsistencies demonstrate that the VA’s conclusions with respect to the present award decision are arbitrary and capricious…

SSI’s Motion for Judgment on the Administrative Record is Denied. SSI challenges the VA’s award to Change on three grounds.  It alleges that: (1) the VA misconstrued SSI’s proposal in assessing a weakness for SSI’s stated response speed; (2) the VA treated SSI disparately by failing to award SSI a strength that the VA awarded Change for a substantively similar aspect of Change’s proposal; and (3) the VA’s best value determination was arbitrary and capricious.  As explained below, the Court finds that SSI has failed to demonstrate 20 that the VA’s evaluation of its proposal lacked a rational basis, except with respect to SSI’s disparate treatment claim.  However, the Court also finds that SSI has not demonstrated that it was prejudiced by that error because, even if SSI were assigned an additional strength for its technical proposal, SSI would not have a substantial chance of receiving the award…

See the decision here.

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