Ascend Mgmt. Innovations LLC v. DHS ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Ascend Management Innovations :
LLC, :
Petitioner :
:
v. : No. 1273 C.D. 2017
: Argued: March 6, 2018
Department of Human Services, :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER FILED: March 23, 2018
Ascend Management Innovations LLC (Ascend) petitions for review of the
Final Determination of the Pennsylvania Department of Human Services
(Department or DHS), dated August 29, 2017, denying as untimely Ascend’s Bid
Protest No. 2017-BP-13 (protest) to Department’s selection of Keystone Peer
Review Organization, Inc. (KEPRO), for negotiations of a contract under
Department’s Request for Quote No. 6100041382 (RFQ). Ascend claims that its
protest was timely because it was challenging Department’s selection of KEPRO as
a responsible contractor, not the terms of the RFQ, that Department should have
disclosed to Ascend the documents it requested, and that Ascend is entitled to an
evidentiary hearing on whether KEPRO is a responsible contractor. Also before this
Court is Department’s application to lift the stay this Court granted by order dated
November 1, 2017, “staying DHS and KEPRO from executing a contract or DHS
from issuing a purchase order under the RFQ pending resolution of Ascend’s
Petition for Review.” Ascend Mgmt. Innovations LLC v. Dep’t of Human Servs. (Pa.
Cmwlth., No. 1273 C.D. 2017, filed Nov. 1, 2017) (Cohn Jubelirer, J., single judge
op.) (Ascend I), slip op. at 13. Upon review, we find that Ascend’s protest was
timely, and remand the matter to DHS for a reexamination of the merits of Ascend’s
protest.
I. Background
According to the allegations in Ascend’s Petition for Review (Petition),
Ascend has been a provider of specialty and standardized assessments, including the
American Association on Intellectual and Developmental Disabilities’ (AAIDD)
Supports Intensity Scale (SIS). AAIDD owns the intellectual property rights
associated with SIS. “[T]he SIS . . . measures the pattern and intensity of supports
that an adult with intellectual and developmental disabilities needs to be successful
while living an everyday life in the community.” (Petition ¶ 13.) The SIS is complex
to administer. “[E]ach assessment contains 86 items that reflect activities involved
in a successful life in the community along with behavioral and medical needs.” (Id.
¶ 14) “The SIS requires a 1.5-to-2.5 hours of simultaneous interview with a team of
respondents who know the individual well.” (Id. (emphasis omitted).) Because of
the complexity of SIS, AAIDD requires that all SIS assessors “[h]ave a four-year[]
college degree and meet experience requirements,” “[b]e trained using AAIDD
training materials,” and pass a test administered by an AAIDD trainer, as well as
annual reviews. (Id. ¶ 16.) Ascend claims that it performs over 18,000 SIS
2
assessments a year “and to date has performed over 100,000.” (Id. ¶ 22.) Since
2007, Ascend has provided the Commonwealth with SIS assessments statewide, and
a recent review of Ascend’s Commonwealth SIS dataset, conducted by Human
Services Research Institute, found that 100% of Ascend’s assessments were valid.
In contrast, according to Ascend, “AAIDD has noted that, even with appropriate
training, there are multiple states where 30% of administered SIS assessments were
found to be unreliable.” (Id. ¶ 36.)
On April 11, 2017, DHS issued the RFQ. The relevant portions are as follows:
Overview of Project. The Centers for Medicare & Medicaid Services
(“CMS”) requires that DHS-ODP [Office of Developmental Programs]
use a statewide standardized needs assessment to ensure that the
necessary supports and services are consistently and appropriately
delivered to individuals enrolled in the Person/Family Directed Support
(“P/FDS”) and Consolidated waivers. The needs assessment must also
be administered to individuals receiving Autism services, and
individuals receiving services in private and public Intermediate Care
Facilities for Individuals with Intellectual Disabilities (“ICF/ID”), and
individuals on DHS-ODP’s waiting list and individuals identified to
enter the programs. The purpose of this RFQ is to obtain a qualified
Contractor to administer a standardized needs assessment selected by
DHS. In addition, the selected Contractor will be required to document
the results of the assessment tool and enter the results into an
information system designated by DHS. The designated system is
currently SIS Online, but DHS may change the designated system
at any time.
(RFQ, Part I-3, Reproduced Record (R.R.) at 24a (emphasis added).)
Under Part III, entitled “Technical Submittal,” the RFQ stated as follows:
III-1. Objectives.
A. General. The objective of this procurement is to secure the
services of a Contractor to administer standardized needs
assessment for individuals enrolled in the Consolidated and
P/FDS waivers . . . .
3
B. Specific. To achieve the general objective, the Department
has identified the following specific objectives:
1. The selected Contractor must employ and utilize an
adequate number of users to support the required volume
levels. A “user” is defined as a person who administers
an assessment using DHS’s designated statewide needs
assessment tool; who enters assessment results into the
information system designated by DHS and who makes
changes to the data entered into the information system
designated by DHS.
2. The selected Contractor must meet volume and timeline
needs defined in Part III when performing the
administration of the designated statewide needs
assessment.
3. The selected Contractor will capture and enter the needs
assessment results into the DHS designated information
system within the time period defined in Part III,
Section III-9 Tasks.
III.2. Nature and Scope of Project. This Project includes
administering a needs assessment instrument . . . .
DHS-ODP utilizes the Supports Intensity ScaleTM (“SISTM”)
as its needs assessment tool. The American Association on
Intellectual and Developmental Disabilities (“AAIDD”) is
responsible for developing and maintaining the SISTM tool.
The selected Contractor will also be responsible for
administering additional questions as defined by DHS-ODP,
referred to as “the PA Supplement” along with SISTM. The
selected Contractor will administer the assessments using the
SIS Online version. The selected Contractor must have the
capability to administer this version. The Department
estimates that the administration of each face to face assessment
takes about 1.5 to 3 hours to complete, not including travel to and
from a designated location and the activities associated with
coordination or activities related to submission of the completed
assessment.
(Id. at Part III-1, III-2, R.R. at 35a (emphasis added).)
4
Continuing under “Technical Submittal,” for training requirements, the RFQ
stated as follows:
B. Training. The selected Contractor must satisfy the following
training requirements:
1. Each user must be trained by AAIDD-certified trainers on
how to administer the SIS Online assessment tool and to enter
or change data in the information system that is designated by
DHS as the storage repository for this information.
2. Each user must participate in other required trainings, as defined
and approved by DHS, which may include but are not limited to
the following: An Overview of ODP Programs; Everyday Lives;
Individual Support Plans; Person-Centered training; specific
trainings on Autism, and an Overview of Pennsylvania’s
Medicaid Waivers.
3. The selected Contractor shall maintain records demonstrating
training requirements have been met in accordance with the
terms of the purchase order.
Prior to SIS Online training, the selected Contractor will require that
all SIS and PA Supplement users are:
1. Fully credentialed, with evidence the user meets AAIDD user
qualifications;
2. Determined to have no conflict; and
3. Approved by the DHS Project Manager.
The selected Contractor shall maintain records demonstrating that all
SIS and PA Supplement users meet all training requirements.
(Id. at Part III-3.B, R.R. at 36a-37a (emphasis added).)
Still under “Technical Submittal,” but for the subheadings “Tasks” and
“Scheduling,” the RFQ provided: “The selected Contractor must schedule an
assessment meeting with the individual and other required attendees. The selected
Contractor must use an online scheduling mechanism that is compatible with
SIS Online.” (Id. at Part III-9.A.1, R.R. at 43a (emphasis added).)
5
For “Accuracy/Data Integrity” under “Technical Submittal” and “Tasks,” the
RFQ provided:
. . . . In lieu of conducting the inter-rater, inter-respondent and test/re-
test reliability, the selected Contractor may complete AAIDD required
Interviewer Reliability and Qualifications Reviews (“IRQR”) tests.
Individual users must achieve at least an 85% score on the IRQR to
pass. If a user does not pass, the user is not permitted to administer
SIS assessments.
(Id. at Part III-9.D, R.R. at 44a (emphasis added).)
For “Provider and Stakeholder Engagement,” under “Technical Submittal”
and “Tasks,” the RFQ provided:
The selected Contractor must work with DHS-ODP to revise its
handouts and educational material to make them concise and helpful
for those in the various stages of the process. The selected Contractor
will tailor the handouts and educational material to those currently
receiving an initial SIS; those waiting for supports; and those on a
routine quinquennial assessment.
(Id. at Part III-9.F, R.R. at 44a (emphasis added).)
In fiscal year 2015/16, the RFQ noted, more than 9,000 assessments were
completed, and that Department anticipated up to 11,004 assessments in a calendar
year during the term of the purchase order. (Id. at Part III-2, III-3.C, R.R. at 36a-
37a.)
Ascend and KEPRO both submitted a bid in response to the RFQ, although,
at the time, Ascend did not know about KEPRO’s submission. Thereafter,
Department invited Ascend to reevaluate its original pricing because there was a
“marginal difference” between Ascend’s bid and that of KEPRO, although the letter
did not reveal KEPRO’s identity. (R.R. at 64a.)
6
On June 26, 2017, Department notified Ascend that it had not selected Ascend
for negotiations under the RFQ. Instead, Department selected KEPRO.
On June 30, 2017, Ascend filed its protest with Department, alleging, in short,
that KEPRO was not a responsible contractor because it lacked the qualifications
and experience to administer SIS assessments. (Bid Protest, R.R. at 2a, 5a.) Ascend
alleged that AAIDD has never had any relationship with KEPRO; thus, KEPRO was
not authorized to administer a SIS assessment and, if it did so, the results would not
be considered valid. (Id. at 4a.) As an offer of proof, Ascend stated that it had
contacted two representatives of AAIDD, which Ascend identified by name, who
“confirmed that KEPRO has never worked with AAIDD to acquire permission to
conduct SIS assessments, has never received required AAIDD SIS training, has
never received required SIS competence testing, and has never submitted SIS data
to AAIDD or through SIS Online for quality monitoring.” (Id. at 3a-4a.) KEPRO,
Ascend added, had done nothing with AAIDD other than obtain a quote from it
contingent on KEPRO obtaining a contract with the Commonwealth. Further,
Ascend had obtained a proposal KEPRO submitted within the last two years to the
State of Tennessee, in which KEPRO allegedly “misrepresented its experience in
performing SIS assessments in West Virginia and Maryland.” (Id. at 4a (“KEPRO
did not disclose that SIS assessments it supposedly completed did not have the
approval of AAIDD. In fact, in West Virginia, AAIDD took the unusual step of
requiring the State of West Virginia to stop inappropriate and unapproved use of the
SIS statewide.”).) Ascend offered to submit a copy of KEPRO’s proposal to the
State of Tennessee to Department. Ascend added that even the unauthorized SIS
assessments that KEPRO completed in West Virginia and Maryland were extremely
small in number and done over very short project durations. Ascend argued that
7
KEPRO misrepresented its experience with the SIS assessment to Department, and
that, as a result, Department may have awarded technical points to KEPRO that were
unwarranted. (Id.)
As relief, Ascend requested, inter alia, documents KEPRO submitted to
Department “related to any past, current, or prospective contract with AAIDD, any
past, current or prospective AAIDD training or competence testing, and any results
from any quality monitoring from any SIS assessments supposedly administered by
KEPRO,” as well as an evidentiary hearing. (Id. at 5a.)
KEPRO answered, arguing that the RFQ did not require SIS assessment
services but, more generally, needs assessment administration services. (KEPRO
Answer, R.R. at 7a-9a.) If Ascend had wanted the RFQ to provide for limiting
experience to SIS experience alone, Ascend should have requested Department to so
limit the RFQ. (Id. at 11a.) In any case, KEPRO alleged, it has SIS experience.
DHS-Office of Developmental Programs (ODP) also responded to Ascend’s
protest, arguing it was not timely. (ODP Answer, R.R. at 15a-16a.) Essentially,
ODP stated, Ascend was arguing that prior SIS experience should have been a
requirement of the RFQ. Ascend had notice of the requirements of the RFQ on April
11, 2017, when the RFQ was issued. Ascend had to lodge its protest within seven
days thereof, and, since Ascend did not do so, its protest was untimely. In any event,
ODP argued, even if timely, Ascend’s protest lacked merit because, inter alia, the
RFQ did not require SIS experience. (Id. at 16a.) Ascend’s argument that KEPRO’s
technical submittal contained misrepresentations about its SIS experience was based
on speculation. Regarding Ascend’s request for portions of KEPRO’s proposal,
ODP responded that KEPRO’s proposal is confidential until a contract is awarded,
the documentation is unnecessary to the determination of Ascend’s protest, and the
8
Commonwealth Procurement Code1 (Procurement Code) does not provide for
discovery. Finally, as to Ascend’s request for an evidentiary hearing, since Ascend
had offered no material facts in support of its protest, let alone disputed material
facts, no hearing was warranted.
In reply, Ascend argued that its protest was timely because it was challenging
Department’s selection of KEPRO as a responsible contractor, not the terms of the
RFQ. The terms of the RFQ, Ascend contended, were clear: the RFQ required the
use of the SIS assessment, and KEPRO has no SIS experience. Moreover,
Department had used SIS for the past 10 years, and if Department was seeking an
alternative assessment tool, it should have specifically said so in the RFQ. Ascend
further argued that it was entitled to those portions of KEPRO’s proposal regarding
its experience with SIS or some other assessment tool. Ascend stated it was not
seeking discovery but information underlying the focus of its protest, and upon
which ODP was clearly relying.2
On August 29, 2017, the Designee for the Secretary of Human Services, the
Director of the Bureau of Administrative Services (Designee), issued a Final
Determination denying Ascend’s protest. (Final Determination at 10.) The
Designee held that Ascend’s protest regarding the necessity of SIS experience was
untimely and, in any event, lacked merit. In essence, the Designee stated, Ascend
was contending that prior SIS experience should have been a requirement of the
RFQ, but such a contention had to be made within seven days of April 11, 2017,
when the RFQ was issued, making Ascend’s June 30, 2017 protest untimely. The
1
62 Pa. C.S. §§ 101-4509.
2
Attached to Ascend’s reply papers was an exhibit highlighting where in the RFQ SIS was
mentioned.
9
Designee concluded that the only mandatory requirements in the RFQ were that the
“bid” be timely received and properly signed. (Id. at 5-6.)
Even if the protest was timely, the Designee determined that Ascend’s protest
failed on the merits. The Designee stated that the RFQ did not require prior SIS
experience, and Department specifically reserved the right to change the designated
assessment tool at any time. Therefore, it was immaterial if KEPRO had any SIS
experience. Further, Department was required to take into account all the criteria in
selecting the best value contractor and not just one aspect of the technical submittal.
(Id. at 6-7.) The Designee also found Ascend’s allegation that KEPRO’s submittal
contained misrepresentations or inaccurate information unsupported by any
evidence. (Id. at 7-8.) According to the Designee, even if KEPRO submitted a
proposal to the State of Tennessee containing misrepresentations, such did not lead
to the conclusion that KEPRO’s submittal to Department contained any
misrepresentations. (Id. at 8.) In any case, even if KEPRO is inexperienced in
performing SIS assessments, the Designee concluded that such did not render
KEPRO incapable of obtaining the necessary training and administering SIS
assessments “should specific SIS assessments be required.” (Id. at 7.) Thus, the
Designee found that Ascend failed to meet its burden of proof showing that KEPRO
was unqualified or misrepresented its SIS assessment experience.
The Designee also denied Ascend’s request for documents and an evidentiary
hearing because the Designee was able to reach his determination based solely on
the record before him. (Id. at 9.)
Thereafter, Ascend filed with this Court a Petition for Review of
Department’s Final Determination.
10
On November 1, 2017, this Court granted Ascend’s application for a stay “to
the extent of staying DHS and KEPRO from executing a contract or DHS from
issuing a purchase order under the RFQ pending resolution of Ascend’s Petition.”
Ascend I, slip op. at 13. This Court also expedited the briefing of this case.
II. Discussion
A. Timeliness
Ascend argues that, contrary to Department’s conclusion, Ascend was not
protesting the terms of the RFQ but Department’s selection of KEPRO as a
responsible contractor.3 The plain terms and core purpose of the RFQ were to meet
SIS-related objectives. Indeed, the RFQ is rife with references to SIS. Ascend did
not know of KEPRO’s proposal until Department selected KEPRO on June 26, 2017.
Four days later, Ascend filed its protest on the basis that KEPRO misrepresented its
experience and ability to conduct SIS assessments. Therefore, Ascend submits, its
protest was timely.
Department responds that Ascend’s protest was untimely because Ascend was
challenging Department’s decision not to mandate SIS experience in the RFQ. The
RFQ was issued on April 11, 2017, at which point Ascend would have had
knowledge of the basis for its protest, making Ascend’s protest more than two
months later untimely.4
3
This Court’s standard of review is limited to determining whether substantial evidence
supports the necessary findings of fact, whether an error of law was committed, or whether
constitutional rights were violated. Cardiac Science, Inc. v. Dep’t of Gen. Servs., 808 A.2d 1029,
1032 n.3 (Pa. Cmwlth. 2002).
4
KEPRO has intervened and submitted a brief in support of the Final Determination.
KEPRO reiterates the arguments of Department.
11
Under Section 1711.1(b) of the Procurement Code, 62 Pa. C.S. § 1711.1(b), a
protestant has seven days from the time it “knew or should have known of the facts
giving rise to the protest” to file a protest. The question here is whether Ascend
knew, or should have known, of the facts giving rise to its protest on April 11, 2017,
because it was challenging the terms of the RFQ, or on June 26, 2017, because it
was challenging Department’s selection of KEPRO.
In order to resolve this question, we must look to the terms of the RFQ to
determine if the RFQ required the selected contractor to have the ability to
administer SIS assessments from the onset of the contract. See Clairton Slag, Inc.
v. Dep’t of Gen. Servs., 2 A.3d 765, 773 (Pa. Cmwlth. 2010) (stating that a court
reviewing a contract “must strive to ascertain and give effect to the intent of the
parties as found in the written contract”). In the technical submittal portion of the
RFQ, one of the specific objectives identified in the RFQ was that the selected
contractor “employ and utilize an adequate number of users to support the required
volume levels.” (R.R. at 35a.) The RFQ defined a “user” as “a person who
administers an assessment using DHS’s designated statewide needs assessment tool;
who enters assessment results into the information system designated by DHS and
who makes changes to the data entered into the information system designated by
DHS.” (Id.) The RFQ stated that “DHS-ODP utilizes the . . . SIS . . . as its needs
assessment tool,” and that “[t]he selected Contractor will administer the
assessments using the SIS Online version,” which “[t]he selected Contractor must
have the capability to administer.” (R.R. at 35a (emphasis added).) In addition to
this portion of the RFQ, as this Court noted in partially granting Ascend a stay,
[t]here are multiple statements in the RFQ regarding the requirements
of using SIS assessments, the complexity of the SIS assessments and
their administration, the large number of assessments that DHS expects
12
the contractor to complete each year, DHS’s expectation that SIS
assessments would be administered starting from day one, and the
time frame that would be necessary to transition from SIS should DHS
change the assessment protocol that would be used.
Ascend I, slip op. at 10. Thus, as Ascend notes, references to SIS “were not made in
passing.” (Ascend’s Reply Br. at 2.) Instead those references “relate to the
responsibility of the selected contractor, [such as] SIS training, SIS credentialing,
SIS testing, SIS evaluation, and SIS administration.” (Id. (emphasis in original).)
Given the foregoing, we conclude that the only reasonable interpretation of
the RFQ is that the selected contractor had to have the ability to administer SIS
assessments from the onset of the contract. See Omnicare, Inc. v. Dep’t of Pub.
Welfare, 68 A.3d 20, 25 (Pa. Cmwlth. 2013) (concluding that protestant did not have
knowledge of the facts giving rise to its protest based on the terms of the request for
proposals (RFP) because the RFP was unclear); cf. JPay, Inc. v. Dep’t of Corr., 89
A.3d 756, 765 (Pa. Cmwlth. 2014) (holding that there were no ambiguities in the
RFP, and the basis for the protest was evident to the protestant at the time the RFP
was issued).5 Thus, contrary to the Designee’s conclusion, Ascend was not
challenging the terms of the RFQ because the RFQ plainly required the selected
contractor to be able to administer SIS assessments from the onset of the contract.
Rather, Ascend was challenging Department’s selection of KEPRO because, Ascend
claims, KEPRO does not have the ability to administer SIS assessments from the
5
In another section of Department’s brief, arguing against Ascend’s request for an
evidentiary hearing, Department states that “[i]t is unreasonable to assume that every use of ‘shall’
or ‘must’ [in an RFQ] amounts to a mandatory and unwaivable requirement.” (Department’s Br.
at 24 n.2.) Although it is true that “a requirement phrased in the imperative does not necessarily
make the requirement mandatory,” JPay Inc., 89 A.3d at 767, here, our decision is based not only
on the imperative language used in the RFQ but also the number of references to the SIS in the
RFQ and the context in which those references were made.
13
onset of the contract. In other words, under the terms of the RFQ, Ascend alleges
that KEPRO is not a responsible contractor.6 Ascend did not know that Department
had selected KEPRO, or even that KEPRO had submitted a bid, until June 26, 2017.
Therefore, Ascend’s protest submitted four days later was timely.
Since Ascend’s protest is timely, we will remand this matter to DHS for a
reexamination of the merits of Ascend’s protest. As discussed, the RFQ provides
that the selected contractor must have the capability to administer SIS assessments.
However, the Designee did not consider KEPRO’s capability to administer SIS
assessments as required under the RFQ. Thus, the Designee must reexamine the
merits of Ascend’s protest.
B. Disclosure of Documents
Ascend argues that Department should have disclosed to it those documents
“submitted to the Commonwealth by KEPRO related to any past, current, or
prospective contract with AAIDD, any past, current or prospective AAIDD training
or competence testing, and any results from any quality monitoring from any SIS
assessments supposedly administered by KEPRO.” (R.R. at 5a.) This is so because,
6
Department argues that the only two requirements of the RFQ were that the quote be
timely received and that it be properly signed by the contractor. However, the RFQ itself, as does
the Procurement Code, requires that the selected contractor be “responsible.” (R.R. at 33a.) A
“[r]esponsible bidder” is one “that has submitted a responsive bid and that possesses the capability
to fully perform the contract requirements in all respects and the integrity and reliability to assure
good faith performance.” Section 103 of the Procurement Code, 62 Pa. C.S. § 103. A “responsive
bid” is one “which conforms in all material respects to the requirements and criteria in the [request
for proposals].” Id. We note that in JPay, we held that the “only two mandatory requirements” in
the RFP there were “the timeliness of the receipt of the proposal and signature of the offeror on
the proposal – and that [the Office of Administration] could waive any other non-conformity, allow
the offeror to cure or consider the non-conformity in the scoring.” 89 A.3d at 766-67. In JPay,
however, unlike here, the protestant’s protest did not rise to the level of challenging a requirement
of the RFP, the non-fulfilment of which would have rendered the bid non-responsive.
14
Ascend claims, Department clearly relied on those documents to conclude that
KEPRO did not misrepresent its experience in the proposal and that KEPRO is a
responsible contractor. ODP, Ascend notes, claimed that these documents were
confidential, but the Designee concluded that these documents were not needed to
render a determination. Ascend claims that ODP had to have reviewed KEPRO’s
submissions to determine if there were any misrepresentations.
Department argues that Ascend’s request for documents was properly denied
because Department did not rely on those documents in reaching the Final
Determination.
We begin with the understanding that “[t]he Procurement Code does not
provide protestants a right to production of documents or other discovery.”
UnitedHealthcare of Pa., Inc. v. Dep’t of Human Servs., 172 A.3d 98, 105 (Pa.
Cmwlth. 2017). Section 1711.1(e) of the Procurement Code,7 while it provides a
protestant with the right “to review and address documents on which the agency
designee bases his ruling on the protest, that right is limited to documents on which
the agency designee actually relies.” Id. (internal citations omitted).
Here, as Department points out, the Designee did not need to rely on any
additional documentation in order to reach the Final Determination on the basis that
7
Section 1711.1(e) of the Procurement Code provides as follows:
The head of the purchasing agency or his designee shall review the protest
and any response or reply and may request and review such additional documents
or information he deems necessary to render a decision and may, at his sole
discretion, conduct a hearing. The head of the purchasing agency or his designee
shall provide to the protestant and the contracting officer a reasonable opportunity
to review and address any additional documents or information deemed necessary
by the head of the purchasing agency or his designee to render a decision.
62 Pa. C.S. § 1711.1(e).
15
Ascend’s protest was untimely and lacking merit. However, the Designee’s
determination was based on a misreading of the RFQ. Since Ascend’s protest was
timely, and this matter must be remanded to Department for a reexamination of the
merits of Ascend’s protest, based on a proper reading of the RFQ, Department’s
Designee may need to rely on other documents besides those that the parties
submitted, such as KEPRO’s bid, in order to resolve the merits of Ascend’s protest.
If so, under Section 1711.1(e), Ascend would be entitled to “review and address”
these documents. 62 Pa. C.S. § 1711.1(e).
C. Evidentiary Hearing
Ascend claims that the Designee abused his discretion in denying its request
for an evidentiary hearing because there were disputed issues of material fact relative
to KEPRO’s misrepresentations about its SIS experience and ability to conduct SIS
assessments. Ascend’s claims were not speculative but based on a prior proposal
KEPRO submitted to the State of Tennessee and information Ascend had received
from two representatives of AAIDD who, had there been an evidentiary hearing,
could have been called to testify that KEPRO had never administered a valid SIS. If
the Court does not reverse the Determination and award to KEPRO, the Court should
remand to Department for an evidentiary hearing.
Department counters that the Designee did not abuse his discretion in denying
Ascend an evidentiary hearing because there are no disputed facts here. The
Designee concluded that the record before him contained all the information he
needed to issue a determination. Department asserts that the basis for Ascend’s
protest, that KEPRO may have misrepresented its SIS experience, was supported by
only conjecture. In any event, Department reiterates, “the RFQ did not require a
16
level of SIS experience as a prerequisite to selection.” (Department’s Br. at 24.)
Moreover, Department argues, KEPRO met the requirements of the RFQ.
Pursuant to Section 1711.1(e) of the Procurement Code, the head of the
purchasing agency or, as here, his designee may conduct a hearing on a bid protest
“at his sole discretion.” 62 Pa. C.S. § 1711.1(e). Only if the designee has exercised
his discretion with bad faith, fraud, capricious action or abuse of power will we
reverse the refusal to hold a hearing. Durkee Lumber Co., Inc. v. Dep’t of
Conservation and Nat. Res., 903 A.2d 593, 597 (Pa. Cmwlth. 2006). “If . . . there
are no disputed material facts necessary to make his determination, then necessarily
he has not abused his discretion” in refusing to hold a hearing. Id.
Since the matter is being remanded, it is for the Designee to determine in the
first instance, based on a proper reading of the RFQ, whether a hearing is warranted
because there are disputed issues of material fact as to KEPRO’s ability to administer
SIS assessments. Whether a hearing is warranted may require the Designee, in light
of Ascend’s offer of proof, to examine other documents besides the documents the
parties submitted in the filing, response and reply of the protest, including KEPRO’s
bid. 62 Pa. C.S. § 1711.1(e) (“The head of the purchasing agency or his designee
shall review the protest and any response or reply and may request and review such
additional documents or information he deems necessary to render a decision.”)
(emphasis added). We note, however, that it would have been better practice for
Ascend to have laid bare its proof by, for example, submitting with its protest the
proposal KEPRO submitted to the State of Tennessee, rather than alleging its
existence, and affidavits from the two representatives of AAIDD, rather than
recounting conversations Ascend had with them. See UnitedHealthcare of Pa., Inc.,
17
172 A.3d at 105-06 (recounting the limited rights of a protestant to the production
of documents and a hearing).
D. Stay
Department has filed an application to lift the stay this Court granted staying
Department and KEPRO from executing a contract or Department from issuing a
purchase order under the RFQ pending resolution of the Petition. Department argues
that when this Court issued the stay, it did so at least partially on the basis that the
parties had agreed to forego oral argument and submit the matter on briefs. Ascend,
however, Department notes, subsequently requested oral argument, which this Court
granted by order dated December 21, 2017. Department argues it will take several
months for this Court to render a determination. Meanwhile, the stay has, and will
continue to, substantially impede Department’s ability to provide essential program
services. If the stay is not lifted, Department argues, it will have to further extend
its contract with Ascend, which has already been extended once, rather than
obtaining services from KEPRO, the best value contractor. Department asserts that
KEPRO and it are ready to finalize and execute a purchase order if permitted to do
so.
Ascend opposes Department’s application, arguing that it would suffer
irreparable harm were the stay lifted. Instead, Ascend argues, the status quo should
be maintained.
Since the matter is being remanded to the Designee for a reexamination of the
merits of Ascend’s protest, the procedural posture of this matter will be relegated to
that of Ascend’s initial protest. When “a protest is filed timely . . . and until the time
has elapsed for the protestant to file an appeal with” this Court, the automatic stay
18
of Section 1711.1(k) of the Procurement Code takes effect. 62 Pa. C.S. § 1711.1(k).
Therefore, while we lift the stay this Court granted by Order dated November 1,
2017, the effect of our resolution of Ascend’s appeal is to stay Department’s award
of the contract under the RFQ to KEPRO pursuant to Section 1711.1(k).
_____________________________________
RENÉE COHN JUBELIRER, Judge
Judge Fizzano Cannon did not participate in the decision in this case.
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Ascend Management Innovations :
LLC, :
Petitioner :
:
v. : No. 1273 C.D. 2017
:
Department of Human Services, :
Respondent :
ORDER
NOW, March 23, 2018, the Final Determination of the Pennsylvania
Department of Human Services (Department), dated August 29, 2017, is
REVERSED, and the matter is remanded to Department’s Designee for a
reexamination of the merits of Bid Protest No. 2017-BP-13 of Ascend Management
Innovations LLC. The Application of Department to lift the Stay granted by this
Court in this matter by Order dated November 1, 2017, is GRANTED.
Jurisdiction relinquished.
_____________________________________
RENÉE COHN JUBELIRER, Judge