Appropriateness of Indian Health Service's Request for Proposals 
(23-JAN-02, GAO-02-343R).					 
								 
GAO reviewed the appropriateness of a termination of a 1997	 
request by the Indian Health Services (IHS) for proposals to	 
provide computed tomographic scanning services for the Blackfeet 
and Crow Service Units in Montana. GAO found no indication that  
IHS negotiated in bad faith. GAO's Office of Special		 
Investigations had looked into the case in December 1998. GAO	 
determined that the case was not within the scope of ongoing work
and referred the case to the Department of Health and Human	 
Services Office of Inspector General (OIG). A June 1999 report by
the OIG concluded that the allegations were unwarranted.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-343R					        
    ACCNO:   A02694						        
  TITLE:     Appropriateness of Indian Health Service's Request for   
Proposals							 
     DATE:   01/23/2002 
  SUBJECT:   Health care services				 
	     Solicitation cancellation				 
	     Native American businesses 			 
	     Women-owned businesses				 
	     Small business					 

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GAO-02-343R

Indian Health Service

United States General Accounting Office Washington, DC 20548

January 23, 2002 The Honorable Max Baucus United States Senate

Re: Appropriateness of Indian Health Service?s Request for Proposals Dear
Senator Baucus: You requested that we review the appropriateness of a
termination of a 1997 Indian Health Services request for proposals 1 to
provide computed tomographic scanning (CT Scan) services for the Blackfeet
and Crow Service Units in Montana. Specifically, you were concerned about
the allegations that Indian Health Services negotiated in bad faith with a
Native American, women- owned, small business.

We could find no indication that IHS negotiated in bad faith. GAO?s Office
of Special Investigations had previously looked into the case in December
1998 (Control Number 40212). GAO determined that the case was not within the
scope of ongoing work and referred the case to the Department of Health and
Human Services, Office of Inspector General (HHS/ OIG). In June 1999, the
HHS/ OIG issued a report concluding that the allegations were unwarranted. A
copy of the HHS/ OIG report is enclosed.

Specifically, the HHS/ OIG found that Indian Health Services committed
$840,000 to acquire computed tomographic scanning services for the service
units to avoid having to transport patients offsite to receive services at a
cost of $850.00 per scan. However, Indian Health Services? requirements
changed. The Blackfeet Service Unit was to undergo major remodeling within 2
years, and the Crow Service Unit did not have the space or construction
funds to accommodate the proposed scanning services. Upon receiving this
information, the contracting officer reassessed Indian Health Services?
needs and cancelled the request for proposals. In a negotiated procurement,
a contracting officer can cancel a request for proposals at any time if the
contracting officer has established a reasonable basis for doing so.

1 RFP- 244- 97- 0018- JLB.

GAO- 02- 343R Indian Health Service Page 2 As agreed with your staff, we
will not be pursuing this issue further and consider your

request closed. If you have any questions regarding this letter, please
contact me on (202) 512- 4125 or Hilary Sullivan on (214) 777- 5652.

Sincerely yours, David E. Cooper Director Acquisition and Sourcing
Management
*** End of document. ***