Washington, D.C., September 17, 2024 – The U.S. Government Accountability Office (GAO) has sustained in part and denied in part a bid protest filed by MAXIMUS Federal Services, Inc., challenging a labor requirement in a $6.6 billion contract solicitation from the Department of Health and Human Services (HHS). The contract, under request for proposals (RFP) No. 75FCMC24R0010, seeks services for operating a nationwide call center supporting Medicare (1-800-Medicare).
MAXIMUS, based in McLean, Virginia, objected to a clause in the solicitation requiring contractors to enter into a Labor Harmony Agreement (LHA) with any labor organization interested in representing employees performing work under the contract. LHAs typically include commitments by the employer to allow union organizing in exchange for the union’s agreement not to strike.
While GAO dismissed most of MAXIMUS’s claims, it upheld the protest concerning the ambiguity of how long a contractor has to negotiate the LHA before the contract is awarded. GAO found that the solicitation was unclear on this point, creating confusion about the pre-award negotiation process.
MAXIMUS had argued that the LHA requirement violated federal labor laws and restricted competition. GAO, however, rejected these claims, stating that labor laws such as the Labor Management Relations Act (LMRA) and the National Labor Relations Act (NLRA) do not apply to procurement challenges. It also confirmed that the Federal Acquisition Regulation (FAR) does not prohibit agencies from mandating LHAs.