TRICARE Protests: Round 2

HNFS argued that the acceptability of this as a proposed solution should have reasonably been challenged, or at least questioned by TMA, because of AGHP's significantly lower compensation plans. The GAO was apparently receptive to these concerns and also felt it was unreasonable for TMA to have failed to account for this. We agree that any offeror's plans to hire large numbers of an outgoing contractor's workforce with the explicit acknowledgement that it will not match current levels of compensation should be examined carefully, and evaluated accordingly. While we agree with GAO that it was unreasonable for TMA not to have considered this, we think it was equally unreasonable for GAO not to have taken the next logical step in a hypothetical discussion of this sort.

In today's economic environment, with one in ten people out of work, just keeping a job under any circumstances (e.g., with a lower salary, fewer hours, less benefits, etc.) would for most people be a more logical and reasonable choice than the decision to walk away from an offer to keep your job, but at a lower salary. Given a choice of keeping your job with a lower salary under a new employer, or becoming unemployed in today's economy, we think the "reasonable" choice for most people would be to keep their position at a lower salary, rather than risk the uncertainty of being unemployment in today's economy.

This seems like a rather obvious omission of "reason" from GAO's analysis. Had GAO extended this concept of "reasonableness" logically, AGHP's proposed plans would have seemed more realistic and credible...and less likely to have been challenged by GAO.

4. AGHP hired a former high-level TMA employee to help prepare its proposal, and failed to disclose this to the Contracting Officer before award. This created an appearance of impropriety based on the unfair competitive advantage stemming from the individual's access to non-public proprietary and sensitive information. The record shows that the individual had access to non-public proprietary information concerning the protester's performance of the incumbent contract, which appeared relevant to the challenged procurement.

On first blush, AGHP's hiring of the former high-level TMA official (in this case, the TMA Chief of Staff) seems to present a rather glaring appearance of impropriety. On the other hand, we have seen GAO decisions that have legally justified all kinds of employment and consulting relationships, which appear at least to the general public to be fairly obvious conflicts of interest or present the appearance of an unfair competitive advantage.

So the fact that a former high ranking TMA official was hired by AGHP isn't, in and of itself, per se evidence of something "rotten in the state of Denmark". In fact, the individual in question had obtained several letters from the TMA ethics office clearing him to work on selected aspects of the proposal. Information gathered during the protest, however, indicated that while still employed at TMA, the individual participated in a number of meetings and had access to a number of documents that did include proprietary information about HNFS' contract with TMA.

Furthermore, the individual involved was advised in the letter from the ethics office that prospective offerors were to contact the contracting officer if they had questions about whether their working relationships presented potential issues. AGHP apparently did not do this, giving GAO, in effect, a "smoking gun" with which to sustain yet another basis of the protest.

For organizations interested in federal healthcare contracting, the lessons from this series of TMA contracts and the protests that followed continue to be learned and, in some cases, forgotten. As the saying goes, "it ain't over until the fat lady sings" and she's still waiting in the wings. Given the magnitude and significance of these contracts, we will continue to follow developments and offer commentary in subsequent articles as the process unfolds. Stay tuned.