In three recent, unreported decisions arising out of the same procurement, the Commonwealth Court has held that a meeting between the public entity and a bidder, after bids had been received in response to an RFP, but before the bidder was determined to be responsible and before its proposal was deemed to be responsive or the most advantageous, was unauthorized and improper.
In July 2016, the Pa. Department of Human Services (DHS) issued an RFP seeking proposals from managed care organizations to provide health care services in five different “zones” to medical assistance beneficiaries. In November 2016, after bids were received, the DHS issued a selection memo which was subsequently rescinded due to a scoring error. In December 2016, after rescission of the November selection memo but before a new selection of bidders was made, DHS and its counsel met with representatives of a bidder, Pennsylvania Health & Wellness, Inc. (PHW), to discuss PHW’s “operational readiness to operate as an MCO on a statewide basis.”
After this December meeting, DHS issued a new selection memo under which Aetna Better Health of Pennsylvania, Inc. (Aetna) and United Healthcare of Pennsylvania, Inc. (United) were not selected for any zones, and Vista Health Plan, Inc. (Vista) was selected for only three zones. On the other hand, based on prior discussions between PHW and DHS, PHW was selected but only in three zones.
Unaware of the December meeting between DHS and PHW, Aetna, United, and Vista all filed protests challenging their non-selection. After they learned of the meeting, Aetna, United, and Vista amended their protests to allege that the December meeting was improper and a violation of the Procurement Code and the RFP. The DHS’s acting designee denied the three protests, prompting Aetna, United, and Vista to appeal to the Commonwealth Court.
On appeal, the Commonwealth Court analyzed provisions of the Procurement Code, the Procurement Handbook, and the RFP itself, and sided with Aetna, United, and Vista, finding that the December meeting between DHS and PHW was unauthorized and improper:
Based on the foregoing, it is clear that the Director erred in denying [the] bid protests. The December 19th meeting between the Department’s Deputy Secretary for OMAP and Deputy Chief Counsel in the Department’s Office of General Counsel, and Centene’s Chairman and CEO and Executive Vice President and the Chief Business Development Officer, which occurred after the bids had been opened, but before PHW was found to be a “responsible offeror” and before its proposal was determined to be responsive or the most advantageous, was not authorized by the Reissued RFP thereby violating the Procurement Code and the Procurement Handbook.
The Commonwealth Court opinions can be found here, here and here.
The takeaway from these three decisions? Once bids are opened, a public owner is severely limited in its ability to meet with bidders and discuss their bids. Any meeting which might confer a competitive advantage or unlevel the playing field will most likely invalidate the bidding altogether.
If you need assistance with a bid protest, feel free to call or email me. I’ll be happy to assist in anyway possible.
Christopher I. McCabe, Esq.
