FEMA Sued For Moving Forward With Disputed COVID-19 Deal

By Daniel Wilson
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Law360 (November 16, 2020, 8:53 PM EST) -- A COVID-19 testing firm has accused the Federal Emergency Management Agency of wrongly pushing ahead with a $48 million no-bid contract for testing services amid a protest of the deal, saying the supposed urgency of the contract didn't exist or stemmed from FEMA's failure to act earlier.

There were no unexpected "urgent and compelling circumstances" to justify overriding the stay imposed on the rapid coronavirus testing deal by the U.S. Government Accountability Office, Comprehensive Health Services LLC said Friday, urging the Court of Federal Claims to block the contract from moving forward while its protest plays out.

"[FEMA] fails to indicate why COVID-19 management strategies that have been sufficient, even if not ideal, for seven months cannot now be used even for a few weeks to permit a competitive procurement," Comprehensive said.

FEMA had awarded the disputed sole-source deal to Wellness Coaches USA LLC on Oct. 3, covering rapid antigen coronavirus tests at FEMA facilities and disaster sites, according to the complaint. The deal was publicly revealed on Oct. 30, and Comprehensive protested to the GAO on Nov. 3, which would normally trigger an automatic stay on the contract until the protest is resolved.

FEMA had justified the sole-source deal by saying it needed to address an "unusual and compelling urgency" given the pandemic, and on Nov. 10 said it would override the automatic stay, similarly citing urgent and compelling circumstances — preventing the spread of the coronavirus during the colder months of the year, Comprehensive said.

The agency argued its other options, such as abiding by the stay or asking the GAO for an expedited ruling, would delay putting COVID-19 testing in place and were not prudent, Comprehensive said.

But the national emergency leading to the need for the contract had been declared months prior, in March, and FEMA's justification documentation for overriding the stay showed that it knew ahead of time that it would want on-site testing in place by fall, the company said. 

It was not clear in FEMA's justification why it had not performed advance planning that would allow for a competitive procurement, especially as that same documentation indicated that FEMA had begun related market research in March and had identified at least four sources that could perform the required work, according to Comprehensive.

Comprehensive also noted that the disputed deal was awarded only after the company had protested a similar September procurement that had given bidders only a six-hour window to submit bids, which it had argued was unduly restrictive.

That earlier protest had prompted FEMA to say it would take corrective action before it later changed tack and issued the sole-source deal, Comprehensive said. If FEMA had just moved forward with that proposed action, it could have made a competitive contract award by mid-October, according to Comprehensive.

The company asked for an injunction until its GAO protest is completed. The claims court will consider the motion at a hearing on Thursday.

A representative for FEMA declined to comment Monday, noting it does not comment on pending litigation. A representative for Wellness Coaches was not immediately available for comment.

Comprehensive is represented by Elizabeth N. Jochum, Todd M. Garland and Jessica L. Nejberger of Smith Pachter McWhorter PLC.

FEMA is represented by John M. McAdams of the U.S. Department of Justice's Civil Division.

The case is Comprehensive Health Services LLC v. U.S., case number 1:20-cv-01585, in the U.S. Court of Federal Claims.

--Editing by Aaron Pelc.

For a reprint of this article, please contact reprints@law360.com.

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