The Department of Veterans Affairs (VA) is evaluating its next move this week, after the U.S. Governmental Accountability Office (GAO)—a congressional investigative and arbitration agency—sustained a protest from IBM regarding a multimillion contract for real-time location system (RTLS) technology at VA hospitals. In June 2012, the VA’s Veterans Health Administration (VHA) division announced that it had awarded an indefinite-delivery, indefinite-quantity (IDIQ) contract to Hewlett Packard‘s HP Enterprise Services division for an RTLS solution (see RFID News Roundup: Veterans Affairs Awards $543 Million RTLS Contract to HP to Cover All VA Hospitals, Clinics). The contract includes a five-year ordering period from the date of the award, with a maximum total value of $543 million. IBM had been one of five vendors that did not win the contract.
VA intends to employ RFID tags to track equipment and supplies at 21 of its Veteran Integrated Service Networks (VISNs), which comprise a total of 152 medical centers and 1,400 ancillary facilities. Typically, a VISN consists of five to 11 medical centers, as well as dozens of clinics. The VA estimates that for each VISN, a typical installation would include approximately 27,000 active tags and 107,000 passive tags. By the end of five years, the agency expects to have the RTLS solution installed across all 21 VISNs, with more than 5 million assets tagged and being tracked.
With its decision to uphold IBM’s protest, the GAO asked the VA to re-evaluate the proposals from vendors, including HP and IBM. In addition, it recommended that, “if necessary or advisable,” the VA should reopen the competition to enable vendors to make any necessary changes to their proposals.
The VA will comply with the GAO’s decision and recommendation, says Kimberly Brayley, the director of the agency’s RTLS Project Management Office, who indicates that her department is still working out the exact details of that response.
In nearly all sustained protest cases, according to Ralph White, the GAO’s managing associate general counsel for procurement law, the parties agree to accept his organization’s recommendation.
IBM filed a protest with the GAO on June 25, challenging the VA’s choice to award the contract to Hewlett-Packard. The VA subsequently ordered all work stopped on the project until the GAO made its decision. On Oct. 3, the GAO issued that decision, stating that “the VA had made several prejudicial errors in its evaluation of the offerors’ proposals. Those errors led to a source selection decision that GAO found was unreasonable since it relied on the erroneous evaluation conclusions to support the award decision.”
In December 2011, the VA had issued its request for proposal for the RTLS project to equip all 21 of its VISNs with RTLS technology (see U.S. Veterans Department Announces RFP for Nationwide RTLS Solution). HP was selected from a total of six proposals received, including one submitted by IBM. The integrated RTLS solution is intended to track and identify assets and patients, with badges and tags attached to objects or people. It includes Wi-Fi-based location-finding functionality, active and passive tags, and other location technologies, such as ultrasound and infrared.
“HP Enterprise Services (HP ES) is disappointed with the GAO decision,” says Ericka Floyd, HP Enterprise Services’ U.S. public sector media relations manager. However, she adds, “As a dedicated contractor to the U.S. Department of Veterans Affairs, HP ES will continue to proudly serve the VA in support of its mission to enhance veteran patient care.”
IBM has declined to comment for this story.
In its protest, IBM had argued that the VA’s evaluation process for technical proposals was erroneous. “Those errors led to a source selection decision that GAO found was unreasonable,” White says, “since it relied on the erroneous evaluation conclusions to support the award decision.” He declines to provide specifics regarding what was erroneous about that process, but adds, in an e-mailed statement, that the “GAO’s decision expresses no view as to the merits of these firms’ respective proposals.”
Today’s decision was issued under a protective order, White notes, which limits what he is allowed to say about the details, “because the decision may contain proprietary and source selection sensitive information. GAO has directed counsel for the parties to promptly identify information that cannot be publicly released, so that GAO can expeditiously prepare and release a public version of the decision.” When that public version becomes available, he says, it will be posted to the GAO’s Web site.