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BLUE CROSS & BLUE SHIELD OF MARYLAND, INC. v. UNIT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


July 17, 1989

BLUE CROSS AND BLUE SHIELD OF MARYLAND, INC., Plaintiff,
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant

Joyce Hens Green, United States District Judge.

The opinion of the court was delivered by: GREEN

MEMORANDUM OPINION

JOYCE HENS GREEN, UNITED STATES DISTRICT JUDGE

 In this action for declaratory and injunctive relief, plaintiff Blue Cross and Blue Shield of Maryland, Inc. ("Maryland") challenges the award of a contract to Empire Blue Cross and Blue Shield ("Empire") by defendant United States Department of Health and Human Services, Health Care Financing Administration ("HCFA") for the maintenance and enhancement of the Medicare Common Working File ("CWF") system, a data file containing Medicare beneficiary information. Maryland claims that the selection of Empire was improper because defendant did not evaluate the submitted proposals in accordance with the criteria set forth in the solicitation document. The matter now comes before the Court on the parties' cross-motions for summary judgment, the oppositions, replies, and the numerous surreplies and responses thereto. *fn1" For the reasons stated below, plaintiff's motion is granted and defendant's motion is denied.

 I. BACKGROUND

 Medicare is a program under which the Government provides health care benefits to the aged and disabled. The Medicare Act, 42 U.S.C. § 1395, et seq., establishes two parts of the Medicare Program. Part A provides for basic hospital and other institutional and home health services and is administered under agreements with organizations known as "Intermediaries." 42 U.S.C. § 1395h. Part B is a voluntary supplemental program providing reimbursement for the covered services of physicians and other health care professionals, and medical supplies and equipment and is administered by organizations known as "Carriers." 42 U.S.C. § 1395u(f). *fn2"

 The Health Care Financing Administration is the agency within the Department of Health and Human Services which is responsible for the administration of Medicare. The HCFA currently has contracts with both Maryland and Empire as "Carriers" under Part B of the Medicare Program. Empire administers Part B in a large portion of the State of New York under a contract entered into on October 1, 1987. Maryland administers Part B for most of the State of Maryland under a contract entered into on October 1, 1987. Both contracts have expiration dates of September 30, 1989. *fn3" By a Memorandum of Understanding dated September 30, 1987, and an amendment to Maryland's Part B Carrier Contract of October 1, 1987, Maryland undertook the development, installation, and initial implementation of the Common Working File ("CWF") system on a pilot basis. *fn4" On September 30, 1988, defendant issued Proposal Submission Requirement number 88-04-A, B ("PSR") to solicit proposals for the maintenance and enhancement of the Medicare CWF system. The solicitation was made only to existing Medicare Intermediaries and Carriers. The PSR stated that the proposals would be evaluated in three major areas: technical, experience, and cost, in descending order of importance. n5 The PSR also stated that the award would be made to the offeror whose proposal was technically acceptable and whose technical/experience/cost relationship was the "most advantageous to the Government." n6 Six proposals were received by the closing date of November 28, 1988. On December 20, 1988, defendant established a competitive range of three offerors, including Maryland and Empire. Best and Final Offers ("BAFO") were submitted on January 18, 1989. The three offers were rated as follows: n7 Maryland Empire Arizona Technical 486 449 500 Experience 258 300 246 Cost 193 200 167 Total 937 949 913

19890717

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