Protest challenging the task order awardee had an unmitigated organizational conflict of interest is sustained, where the agency failed to reasonably investigate the extent to which the awardee’s subsidiary would review the work processed by the awardee, as well as by its competitors, and where the agency failed to investigate whether the awardee had benefited from the subsidiary’s access to nonpublic, competitively useful information housed on the agency’s systems.
C2C Innovative Solutions Inc. protested the Centers for Medicare and Medicaid Services’ award of a contract supporting the Medicare appeals process to MAXIMUS Federal Services Inc., arguing that CMS failed to meaningfully consider an impaired objectivity organizational conflict of interest resulting from the role of MAXIMUS’ subsidiary in performing the senior appeals reviews.
C2C alleged there MAXIMUS had multiple OCIs that cannot be mitigated. First, C2C argued that MAXIMUS had an impaired objectivity OCI because its subsidiary Q2 Administrators would be in a position to review MAXIMUS’ decisions. C2C argued that Q2A would be able to refer decisions that overturn or partially overturn MAXIMUS’ reconsideration decisions. According to C2C, because the companies are conjoined, Q2A would be financially motivated to withhold issues regarding its own processing of QIC reconsiderations, while simultaneously emphasizing to CMS any discrepancies in the reconsideration processing of its competitors, including C2C’s. C2C argued that selective notifications of questionable processing to CMS tarnish the reputation of MAXIMUS’s competitors’ and benefit the awardee when the task order is recompeted.
In response, CMS and MAXIMUS argued there was no OCI, despite the relationship between MAXIMUS and Q2A, because Q2A only examines the sufficiency of MAXIMUS’s decisions. CMS explained that it reexamined the potential OCIs after receiving C2C’s allegations and found none, because Q2A would not have formal responsibility for evaluating its parent’s administrative decisions.
However, GAO disagreed and sustained the protest, finding that CMS did not investigate whether the presence of related firms’ operation within the same chain review for Medicare appeals created an impaired objectivity OCI. GAO determined that CMS had not meaningfully examined whether Q2A could render objective advice while MAXIMUS served as the QIC.
Next, C2C argued that MAXIMUS had an unequal access to information OCI because Q2A has access to non-public, competitively useful information from the Medicare appeals system due to its role as the AdQIC contractor. MAXIMUS acknowledged in an affidavit the non-public nature of the information and raised several arguments to mitigate the advantage provided by its access to the information.
GAO sustained the protest on this ground, finding that Q2A had access to all information within the Medicare Appeals System for MAXIMUM’s appeals, including decision letters and case file documents. GAO concluded that the OCI review was not comprehensive because CMS never investigated whether Q2A had access to any of C2C’s non-public information. According to GAO, the agency’s OCI analysis failed to address whether the information was non-public and whether it could provide a competitive advantage.
C2C Innovative Solutions Inc. is represented by Thomas K. David, Kenneth Brody, and Katherine David of David, Brody & Dondershine, LLP. MAXIMUS Federal Services Inc. is represented by Brian A. Darst of Odin Feldman Pittleman PC. The government is represented by Douglas Kornreich and Lucy G. Mac Gabhann, Department of Health and Human Services. GAO attorneys Stephanie B. Magnell and Amy B. Pereira participated in the preparation of the decision.
