UnitedHealthcare of Pennsylvania, Inc. v. Department of Human Services
172 A.3d 98
| Pa. Commw. Ct. | 2017Background
- The Department of Human Services issued an RFP for managed-care organizations to provide Community HealthChoices (CHC) across five geographic zones; proposals had a Technical Submittal (80%) and SDB submittal (20%), plus up to 3% bonus for Domestic Workforce Utilization.
- Pennsylvania offerors had to submit Pennsylvania HEDIS rates; non-Pennsylvania offerors could submit HEDIS rates for a state where they operate an HMO (confirmed in RFP addenda).
- Three offerors (PHW, Vista/AmeriHealth Caritas, UPMC) ranked top three in each zone and were selected for contract negotiations; UnitedHealthcare ranked fourth in all zones and was not selected.
- UnitedHealthcare filed a bid protest more than seven days after the selection notice (but within seven days of its debriefing), alleging: unfair HEDIS weighting/advantage to PHW, improper delegation of SDB scoring to DGS/BDISBO, entitlement to procurement documents and a hearing, and other challenge to selected offerors’ qualifications.
- The Department’s designee denied the protest as untimely for the HEDIS and SDB claims, refused to produce documents or hold an evidentiary hearing, and applied the statutory standard of review; UnitedHealthcare appealed.
- The Commonwealth Court affirmed: no due-process or Procurement Code right to the requested documents or an automatic hearing; the agency applied the correct standard; and HEDIS and SDB claims were time-barred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to procurement documents / discovery and to an evidentiary hearing | UnitedHealthcare argued it was entitled to other offerors’ proposals, evaluation documents, and a hearing; lack deprived it of due process | Dept. argued Procurement Code does not grant discovery or a right to a hearing; designee may request documents or a hearing at discretion | No due-process or statutory right; documents need only be produced if the agency head/designee deems them necessary or relies on them; hearing discretionary and denial not an abuse where facts not in dispute |
| Standard of review for agency protest determination | UnitedHealthcare argued agency must evaluate whether award was most advantageous (broader review) | Dept. said statutory standard (Section 561) governs: whether decision was clearly erroneous, arbitrary, capricious, or contrary to law | Agency applied correct standard (clearly erroneous/arbitrary/capricious/contrary to law) when ruling on selection protest |
| Timeliness of HEDIS challenge (and whether debriefing tolled time) | UnitedHealthcare claimed HEDIS weighting/unfairness only became apparent at debriefing; thus protest timely | Dept. said RFP and addenda disclosed HEDIS treatment and UnitedHealthcare knew facts more than seven days before filing | HEDIS claim untimely: issues were apparent from RFP/addenda and not newly revealed at debriefing; filing more than seven days after notice barred the claim |
| Timeliness of SDB challenge re: delegation to BDISBO and scoring | UnitedHealthcare argued delegation and SDB scoring practices were improper; debriefing revealed deficiencies | Dept. said RFP disclosed SDB delegation and scoring methodology; UnitedHealthcare had notice before filing | SDB claim untimely: RFP disclosed SDB scoring delegation and criteria; complaint filed too late under 62 Pa. C.S. §1711.1(b) |
Key Cases Cited
- Premier Comp Solutions, LLC v. Department of General Services, 949 A.2d 381 (Pa. Cmwlth.) (disappointed bidder has no due-process right to award of state contract)
- Stanton-Negley Drug Co. v. Department of Public Welfare, 943 A.2d 377 (Pa. Cmwlth.) (no constitutional due-process right for disappointed offeror to procurement award)
- Durkee Lumber Co. v. Department of Conservation and Natural Resources, 903 A.2d 593 (Pa. Cmwlth.) (denial of hearing not an abuse where facts for decision are undisputed)
- JPay, Inc. v. Department of Corrections, 89 A.3d 756 (Pa. Cmwlth.) (no right to discovery under Procurement Code; production limited to documents relied upon by agency designee)
- Bureau Veritas North America, Inc. v. Department of Transportation, 127 A.3d 871 (Pa. Cmwlth.) (strict seven-day filing rule; nunc pro tunc relief only for extraordinary circumstances)
- CenturyLink Public Communications, Inc. v. Department of Corrections, 109 A.3d 820 (Pa. Cmwlth.) (challenges to RFP terms must be filed within seven days of notice)
- Common Sense Adoption Servs. v. Department of Public Welfare, 799 A.2d 225 (Pa. Cmwlth.) (untimely protest to solicitation terms is waived)
- Omnicare, Inc. v. Department of Public Welfare, 68 A.3d 20 (Pa. Cmwlth.) (timeliness rules for procurement protests and when additional facts make a later protest timely)