TITLE: B-311423; B-311423.2; B-311423.3; B-311423.4; B-311423.5, Eastern Medical Equipment, Inc.; Omnicare, Inc.; Dania Medical Equipment & Supplies, Inc.; Chronic Care Pharmaceutical Services, LLC; Wound Management Technologies, Inc., May 1, 2008
BNUMBER: B-311423; B-311423.2; B-311423.3; B-311423.4; B-311423.5
DATE: May 1, 2008
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B-311423; B-311423.2; B-311423.3; B-311423.4; B-311423.5, Eastern Medical Equipment, Inc.; Omnicare, Inc.; Dania Medical Equipment & Supplies, Inc.; Chronic Care Pharmaceutical Services, LLC; Wound Management Technologies, Inc., May 1, 2008
Decision
Matter of: Eastern Medical Equipment, Inc.; Omnicare, Inc.; Dania Medical
Equipment & Supplies, Inc.; Chronic Care Pharmaceutical Services, LLC;
Wound Management Technologies, Inc.
File: B-311423; B-311423.2; B-311423.3; B-311423.4; B-311423.5
Date: May 1, 2008
Jim Marco for Eastern Medical Equipment, Inc.; Robert J. Hill, Esq., Reed
Smith LLP, for Omnicare, Inc.; Lawrence R. Metsch, Esq., The Metsch Law
Firm, P.A., for Dania Medical Equipment & Supplies, Inc., Chronic Care
Pharmaceutical Services, LLC, and Wound Management Technologies, Inc., the
protesters.
Jamie B. Insley, Esq., Department of Health and Human Services, for the
agency.
Peter D. Verchinski, Esq., and John M. Melody, Esq., Office of General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Pursuant to title 18 of the Social Security Act (42 U.S.C. sections
1395-1395hhh), Government Accountability Office lacks jurisdiction over
protests of awards made by Centers for Medicare & Medicaid Services,
Department of Health and Human Services under the agency's Competitive
Acquisition Program.
DECISION
Eastern Medical Equipment, Inc.; Omnicare, Inc.; Dania Medical Equipment &
Supplies, Inc.; Chronic Care Pharmaceutical Services, LLC; and Wound
Management Technologies, Inc. protest the rejection of their bids
submitted in response to the Centers for Medicare & Medicaid Services
(CMS), Department of Health and Human Services (HHS), competitive bidding
program for certain Medicare Part B covered items. The protesters assert
that CMS improperly determined that the firms failed to submit all
required financial documentation with their bids.
We dismiss the protest.
The national Medicare program is administered by CMS, an agency within
HHS, and governed by title 18 of the Social Security Act (codified at
42 U.S.C. sections 1395-1395hhh). Section 1847 of title 18 (42 U.S.C.
sect. 1395w-3) establishes the Competitive Acquisition Programs (CAP) for
the procurement of certain items and services, including durable medical
equipment, prosthetics, orthotics, and supplies (DMEPOS).
In the procurements at issue here, CMS solicited bids under the DMEPOS CAP
for a number of categories of items to be provided to Medicare
beneficiaries. These bids were submitted under the first round of
procurements conducted under CAP, covering 10 metropolitan areas. After
submitting their bids, the protesters were subsequently notified that the
bids had been rejected for failing to include certain financial
information. The protesters then filed these protests with our Office,
asserting that the rejections were improper because the firms had in fact
submitted the information.
The agency argues that our Office is precluded by title 18 of the Social
Security Act from reviewing the protests. We agree.
In addition to establishing the CAP, section 1847 of title 18 includes a
provision addressing administrative or judicial review of the agency's
actions. In this regard, section 1847(b)(10) states as follows:
There shall be no administrative or judicial review under section 1869,
section 1878, or otherwise, of...(B) the awarding of contracts under
this section.
See 42 U.S.C. sect. 1395w-3(b)(10).
The starting point of any analysis of the meaning of a statutory provision
is the statutory language used by Congress. See Consumer Prod. Safety
Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980) ("We begin with the
familiar canon of statutory construction that the starting point for
interpreting a statute is the language of the statute itself.") Where the
language is clear on its face, its plain meaning will be given effect;
that is, if the intent of Congress is clear, "that is the end of the
matter." SmithKline Beecham Pharm., B-271845, Aug. 23, 1996, 96-2 CPD
para. 82 at 3, citing Chevron, U.S.A., Inc. v. Natural Res. Defense
Council, Inc., 467 U.S. 837, 842, (1984).
Here, we find that the language in question is unambiguous. As stated, the
language prohibits any judicial or administrative review of the awarding
of contracts under section 1847. Based on this plain language, since the
procurements here were conducted under section 1847, our Office is
precluded from considering the protests of the awards.[1]
Omnicare argues that section 1847(b)(10) does not preclude GAO's review of
its protest because the firm is not seeking review of the "awarding of
contracts," but rather is challenging the disqualification of its bid. We
do not view this distinction as meaningful. The agency's decision to
reject the protester's bid is a necessary aspect of determining which
bidders are eligible for award under the solicitation. More specifically,
in requesting that we find that its bid should not have been rejected,
Omnicare necessarily is requesting that we find that it should have
received an award. As such, we view the agency rejection of Omnicare's bid
as part of the process of the "awarding of contracts"; our review of its
protest therefore is precluded by the statute.[2]
Omnicare also argues that the jurisdictional exemption in section
1847(b)(10) applies only to actions within the scope of the agency's
authority; since the agency's allegedly improper actions here fall outside
its statutory authority and required duties in administering a competitive
bidding program as Congress intended, they are reviewable under this
provision. Omnicare's Comments, Mar. 31, 2008, at 3. We disagree. In
prohibiting the reviewing of contract awards, section 1847(b)(10) makes no
distinction based on whether the actions in question are "within the scope
of the agency's authority." Again, therefore, we find that review by our
Office is precluded.
Finally, Dania, Chronic Care, and Wound Management argue that GAO is not
precluded from reviewing their protests, since section 1847(b)(10) only
pertains to administrative or judicial review. The protesters suggest that
the term "administrative review" refers only to review by an executive
branch entity; GAO, as a legislative branch agency, has a "legislative"
not an administrative review role. Protesters' Comments, Apr. 1, 2008, at
2. However, the protesters have provided no legal support for their narrow
reading of the term "administrative" in the context of the statute here,
and there is nothing in the statute itself or the legislative history that
indicates Congress intended to exclude GAO review from the exempting
language. See H.R. Conf. Rep. No. 108-391 (2003).[3] This being the case,
and because GAO is the principal federal agency with statutory authority
to review bid protests, we think it is sufficiently clear that the
exempting language was intended to preclude GAO review.[4] Accordingly, we
reject the protesters' interpretation here.
The protest is dismissed.
Gary L. Kepplinger
General Counsel
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[1] We note that CMS's regulations implementing the statute fully support
our reading of the plain language. In this regard, the regulations
implementing section 1847 of the Social Security Act repeat that "[t]here
is no administrative or judicial review under this subpart of the
following...(2) awarding of contracts." 42 C.F.R. sect. 414.424. During
the comment and review period when this regulation was pending, the agency
responded to a suggestion that, given the number of protests sustained by
GAO and the United States Court of Federal Claims, CMS should allow
administrative or judicial review to prevent fraud or arbitrary and
erroneous awards. The agency responded:
We disagree with these comments. The Medicare DMEPOS Competitive Bidding
Program is a unique program that differs in many ways from traditional
government procurement. We are bound to implement this program in
accordance with the statute, which as noted earlier in this section,
provides that there will be no administrative or judicial review of
certain functions.
72 Fed. Reg. 18056 (Apr. 10, 2007). We will give deference to an agency's
reasonable interpretation of its own regulations, and we find nothing
unreasonable in the agency's interpretation of the statute as reflected in
the cited regulation. Israel Aircraft Indus., Ltd.--Recon., B-258229.2,
July 26, 1995, 95-2 CPD para. 46 at 5.
[2] Omnicare asserts that, in rejecting its bid, the agency has deprived
the firm of its property rights without due process of law as required by
the Fifth Amendment of the United States Constitution. However, the
jurisdiction of our Office is limited to deciding protests concerning
alleged violation of procurement statutes or regulations. See 31 U.S.C.
sect. 3552. Because this allegation does not implicate violations of
procurement statutes or regulations, it is not for resolution by our
Office but is a matter for the courts ultimately to decide. DeTekion Sec.
Sys., Inc., B-298235, B-298235.2, July 31, 2006, 2006 CPD para. 130 at 17
n.6.
[3] See also H.R. Rep. 108-181 (2003).
[4] We note that our Office previously has indicated that we view our bid
protest jurisdiction as administrative in nature. See Staber Indus., Inc.,
B-276077, May 9, 1997, 97-1 CPD para. 174 at 2 (failure to follow an
executive order, which specifically states that the order is not intended
to create "any right to administrative or judicial review," provides no
basis for protest to our Office by the order's own terms). The United
States Court of Appeals for the Federal Circuit has indicated likewise.
See NHK Eng'g v. United States, 805 F.2d 372, 378 (Fed. Cir. 1986) (noting
that the Competition in Contracting Act, 32 U.S.C. sections 3551-3556,
provides for an "administrative review" of a protest upon filing with
GAO).