Empower AI, Inc. (RFQ-240179)

B-422971.5 Sep 15, 2025 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Empower AI, Inc. (EAI), of Reston, Virginia, requests that our Office recommend that the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), reimburse EAI the costs associated with filing and pursuing its protests challenging the issuance of a task order to Booz Allen Hamilton, Inc. (BAH), of McLean, Virginia, under request for quotations (RFQ) No. 240179. The RFQ sought services supporting the calculation of improper payment rates under the Medicaid program and the Children's Health Insurance Program. EAI asserts that the agency unduly delayed taking corrective action in the face of clearly meritorious protest allegations. We grant the request in part and deny it in part. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Empower AI, Inc.--Costs File: B-422971.5 Date: September 15, 2025 Daniel P. Graham, Esq., and Llewelyn M. Engel, Esq., McDermott Will & Emery LLP, for the requester. Joon K. Hong, Esq., Department of Health and Human Services, for the agency. Glenn G. Wolcott, Esq., and April Y. Shields, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Request that GAO recommend reimbursement of protest costs is granted where the agency unduly delayed taking corrective action in response to a clearly meritorious protest argument and denied where the other protest allegations were not clearly meritorious. DECISION Empower AI, Inc. (EAI), of Reston, Virginia, requests that our Office recommend that the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), reimburse EAI the costs associated with filing and pursuing its protests challenging the issuance of a task order to Booz Allen Hamilton, Inc. (BAH), of McLean, Virginia, under request for quotations (RFQ) No. 240179. The RFQ sought services supporting the calculation of improper payment rates under the Medicaid program and the Children's Health Insurance Program. EAI asserts that the agency unduly delayed taking corrective action in the face of clearly meritorious protest allegations. We grant the request in part and deny it in part. BACKGROUND On May 22, 2024, pursuant to section 8.405-2 of the Federal Acquisition Regulation (FAR), the agency issued the RFQ to contractors holding certain General Services Administration (GSA) multiple award schedule contracts; the solicitation stated that the agency was seeking quotations to “support the production of the national level payment error rates for Medicaid and Children Health Insurance Program (CHIP) as required by the Payment Integrity Information Act of 2019 (PIIA).” Agency Report (AR), Tab 5, RFQ amend. 0004 at 3.[1] The procurement was conducted under what is generally referred to as the “Payment Error Rate Measurement (PERM)” review program. Id. As amended, the solicitation contemplated issuance of a primarily fixed-price task order[2] for a 6-month transition period followed by a 3-year base period and two 3-year option periods. During performance, the contractor will perform various tasks associated with three types of reviews: (1) medical;[3] (2) data processing;[4] and (3) eligibility.[5] EAI is currently the incumbent contractor for medical reviews and data processing reviews; BAH is the incumbent contractor for eligibility reviews. The solicitation directed vendors to identify their proposed levels of effort in labor categories contained in their GSA schedule contracts, along with the applicable labor rates, and provided that source selection would be based on a best-value tradeoff[6] between the following evaluation factors: technical understanding/scenarios; technical approach; past performance; small business utilization; and price.[7] Of relevance here, the solicitation also advised vendors that: “As directed by CMS, the [contractor] will transition the SMERF [State Medicaid Error Rate Findings] system[8] from the contractor's environment to the CMS cloud environment.” AR, Tab 4B, Statement of Work (SOW) at 34. The agency acknowledges that nothing in the solicitation identified any preference for a particular cloud solution. See Supp. COS at 11. On June 26, 2024, quotations were submitted by four vendors, including BAH and EAI.[9] Thereafter, the agency evaluated the quotations, conducted discussions, and requested and received revised quotations. On September 12, the agency notified EAI that BAH's quotation had been selected for award. On September 23, EAI filed a protest with our Office (docketed as B-422971.1) challenging various aspects of the agency's evaluation and source selection process.