Cigna Government Services, LLC v. United States

The Centers for Medicare and Medicaid Services (CMS) (defendant) issued a competitive bid solicitation for Durable Medical Equipment Medicare Administrative Contractors (DME-MAC) to provide processing and payment services for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Medicare Part D claims. The solicitation stated that bids would be evaluated for best-value procurement, with the most important factor being a prospective contractor’s ability to demonstrate understanding of the contract requirements. The DME-MAC program rollout, including the DME-MAC procurement solicitation, occurred in accordance with the schedule CMS submitted to Congress, which CMS testified had two years’ worth of built-in flexibility. The DME-MAC solicitation was split into four jurisdictions covering the entire United States: A, B, C, and D. When the DME-MAC solicitation was issued, Cigna Government Services, LLC (Cigna) (plaintiff) was, and had been for the past 13 years, performing under a contract to provide similar DMEPOS Medicare Part D claim services in Jurisdiction D. Cigna’s existing contract was going to be terminated and replaced as part of the DME-MAC rollout. Cigna submitted bids for Jurisdictions C and D; neither bid was accepted. Cigna filed a timely bid protest with the Government Accountability Office (GAO), which triggered an automatic 100-day stay of the DME-MAC contract awards pursuant to the Competition in Contracting Act (CICA). CMS overrode the automatic stay, stating that the DME-MAC implementation schedule was too tight to wait out the 100-day stay, and that the risk of harm from delayed implementation exceeded the risk that the GAO would require CMS to recompete the DME-MAC contract following Cigna’s protest. Cigna filed suit in the Court of Federal Claims seeking a permanent injunction and a declaratory judgment that the override was invalid.