https://www.washingtonpost.com/health/2024/06/28/medicare-hotline-contract-hhs-maximus/

Under Review.

I've read this article twice.  In my opinion, it is a poorly written something trying to reach a conclusion with hearsay supporting allegations of something or other.  

This is the current solicitation.  75FCMC24R0010

This is Maximus' current protest.

The LABOR HARMONY AGREEMENT is at H-16 or p. 64 of the solicitation.

If anyone can find the contract that is expiring early, please let me know.  I'd like to see the justification for ending it.

Thanks.

_____________________________

6/29/24

The new solicitation provides for a 1 year base period and 9, 1-year options.  With that in mind, I assumed that one of the options on the current Maximus contract was not exercised.  Apparently, that is correct.  In the current solicitation, there appears to be a Q and A for offerors on the current solicitation.  Q and A #70 states:

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Question:  Has CMS elected not to exercise additional options on the Maximus contract and is this why the contract is being re-competed 5 years before its potential end date?

Answer:  CMS has elected not to exercise all options on the existing call center contract.

Q and A # 72

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Question:  Please describe your level of satisfaction with your current or recent vendor(s) for the same purchasing activity, if applicable.

Answer:   The incumbent has been performing satisfactorily.

Q and A # 73

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Question:  Who is the incumbent, and how long has the incumbent been providing the requested services?

Answer:  Maximus Federal Services is the incumbent.  Maximus has operated the CMS call center since 2013.

Q and A # 90

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Question:  In reference to Section H.16, Labor Harmony Agreement:  

• (A) Please confirm if there is an existing Labor Harmony Agreement in place on the current contract.
• (B) If there is an existing Labor Harmony Agreement in place, please provide a copy.
• (C) If there is an existing Labor Harmony Agreement in place, please provide which labor union is party to the Agreement.

Answer:  There is currently no existing Labor Harmony Agreement in place on the current contract. 

Q and A # 91

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Question:  In reference to a Collective Bargaining Agreement or any other labor contract with a labor organization:
(A) Please confirm if there is a Collective Bargaining Agreement in place on the current contract.
(B) If there is an existing Collective Bargaining Agreement in place, please provide a copy.
(C) If there is an existing Collective Bargaining Agreement in place, please provide which labor union is party to the Agreement.

Answer:  There is currently no existing Collective Bargaining Agreement in place on the current contract.

Q and A # 92

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Question:   Section H.16, subsection (b) provides that “The Contractor shall maintain in a current status throughout the life of the contract the Labor Harmony Agreement entered into prior to the award of this contract......“. Does this provision apply only if there is an existing Labor Harmony Agreement in place under the current contract? 

Answer:  See revised Term and Condition

Q and A # 93

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Question:  In Section H.16, subsection (b), please confirm:
(A) whether offerors must have a Labor Harmony Agreement and/or provide evidence of such Labor Harmony Agreement to be deemed responsive to the solicitation.
(B) Please clarify what offerors are expected to provide, given that not all offerors have service employees currently providing services covered under the existing contract. It is unclear how such offerors would be able to enter into a Labor Harmony Agreement as they have no current service employees, no unionized workforce, and no presence of a labor organization currently demonstrating intent to represent such service employees.

Answer:  

There is no solicitation requirement to submit a Labor Harmony Agreement during the competition.  Once an apparent awardee is selected, if a labor organization has demonstrated intent to represent the employees of the apparent awardee, then it will be expected that the apparent awardee enter into a Labor Harmony Agreement prior to contract award.  If there has been no demonstrated intent to represent the employees prior to contract award, then the contractor would be expected to comply with H.16 once it becomes aware of demonstrated intent to represent its employees. 

See revised Proposal Instructions.

Q and A # 94

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Question:  If Section H.16 requires all offerors to enter into a Labor Harmony Agreement, with which union or unions would the offeror be required to negotiate such an agreement?

Answer:  H.16 does not require all offerors to enter into a Labor Harmony Agreement prior to submission of proposals.  H.16 contemplates the apparent awardee entering into a Labor Harmony Agreement if it has seen demonstrated intent to represent.  If it has not noted a demonstrated intent to represent prior to contract award, then it would need to comply with H.16 requirement if/when it does see a demonstrated intent to represent its employees.  

Q and A # 95

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Question:  If Section H.16 requires all offerors to enter into a Labor Harmony Agreement, any union with which such Labor Harmony Agreement(s) is/are entered into as part of this bidding process would appear to have substantial influence in which bids are responsive or evaluated favorably. Please clarify any steps the agency is or has taken to avoid any actual or perceived unfair competitive advantage or improper influence.

Answer:  H.16 does not require all offerors to enter into a Labor Harmony Agreement prior to submission of proposals.  H.16 contemplates the apparent awardee entering into a Labor Harmony Agreement if it has seen demonstrated intent to represent.  If it has not noted a demonstrated intent to represent prior to contract award, then it would need to comply with H.16 requirement if/when it does see a demonstrated intent to represent its employees.  

Q and A # 96

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Question: If Section H.16 requires all offerors to enter into a Labor Harmony Agreement, many otherwise qualified offerors could be eliminated from competition. Please clarify any steps the agency is taking or has taken to assure adequate competition.

Answer:   H.16 does not require all offerors to enter into a Labor Harmony Agreement prior to submission of proposals.  H.16 contemplates the apparent awardee entering into a Labor Harmony Agreement if it has seen demonstrated intent to represent.  If it has not noted a demonstrated intent to represent prior to contract award, then it would need to comply with H.16 requirement if/when it does see a demonstrated intent to represent its employees.  

Q and A # 97

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Question:  With regard to Section H.16, subsection (c), please clarify what conduct constitutes as a labor organization’s “demonstrated intent” to represent service employees that would trigger a contractor’s obligations to notify the CO and commence negotiations of a Labor Harmony Agreement?

Answer:  The definition is provided in Section H.16(a). 

Q and A # 98

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Question:  Please confirm a contractor’s obligations under Section H.16 subsection (c) would not be triggered until contractor management has actual knowledge of “demonstrated intent".

Answer:  “Actual knowledge” is not the knowledge requirement.  The knowledge requirement is in Section H.16(a) which provides the standard is: “when the Contractor knows or reasonably should know.” 

Q and A # 99

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Question:  Please confirm whether any labor organization has demonstrated intent to represent service employees that would trigger an offeror’s obligation to commence negotiations with such organization. If so, which labor organization(s)?

Answer:  

Demonstrated intent to represent will be the unique experience of each contractor and whether a labor organization has demonstrated intent to represent its employees.

There have previously been demonstrations of intent at limited locations.

It appears that the current Maximus contract may be:  # 75FCMC22C0038

I assume there must be an explanation somewhere why the options were not exercised.  If someone can find it, please post.  I'm going to check the remaining Q and As now.  Also, it would be interesting to see the latest award fee report on Maximus.  The contract type is a CPAF.

So Joe B. wanted something from the contractor in order to bolster political support from labor. The contractor refused, and the agency decided not to exercise the option.

If that's the case, then I think the GAO will deny the protest. An option is, well, an option.

All government contracts are political in one way or another.

 

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So Joe B. wanted something from the contractor in order to bolster political support from labor.

I found nothing to support the above.  However, I wasn't born yesterday.

All socio-economic programs and contract terms are political. They are designed to serve and to please certain political constituencies. They are the products of political thinking and striving. Those are facts of life in government contracting.

On 6/29/2024 at 10:23 AM, Vern Edwards said:

If that's the case, then I think the GAO will deny the protest. An option is, well, an option.

Maybe but I think the reasoning on not exercising the option falls outside of FAR 17.207.  If GAO denies it, the contractor likely will pursue other avenues which I believe they will prevail in one form or another. 
 

Edit:  After reading H.16 again along with the Q&As, the only way an offeror/contractor complies is having employees represented by a union.  I think the protest, or at least part, will claim a Labor Harmony Agreement unduly restricts competition.   If HHS is concerned about labor disruptions, there are other ways to deal with the issue.

Regarding the title of this thread: “What happens when politics and contracting mix”…

It’s nothing new concerning politics over requiring organized labor agreements vs. allowing open shop labor on Federal construction projects.

The following are excerpts from a Wikipedia article “Project Labor Agreements”. I was aware of the back and forth policies of the Presidential Administrations since GHW Bush but couldn’t remember the specific details of the policies.

George H. W. Bush signed Executive Order 12818 prohibiting federal agencies from exclusively contracting union labor for construction projects. Bush's order prohibited the use of PLAs in federal construction projects.

The Clinton administration rescinded this order when President Bill Clinton issued Executive Order 12836 in February 1993, shortly after he took office. This order allowed federal agencies to fund construction projects where contractors required a PLA.

Clinton issued a memorandum on June 5, 1997, encouraging federal departments to consider the use of PLAs for “large and significant” projects. The memorandum required that government agencies review each project to decide whether a PLA would allow the agency to increase efficiency and reduce costs.

On February 17, 2001, George W. Bush signed Executive Order 13202, “Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects”, prohibiting the government or any other sponsor government from mandating use of PLAs for construction projects with federal funding. The EO rescinded Clinton’s Executive Order 12836.

Specifically, the order declared that neither the federal government, nor any agency acting with federal assistance, shall require or prohibit construction contractors to sign union agreements as a condition of performing work on federally funded construction projects.

Barack Obama signed executive order 13502, on February 6, 2009, which urges federal agencies to consider mandating the use of PLAs on federal construction projects costing $25 million or more on a case-by-case basis.This act served to revoke the Bush executive orders 13202 and 13208 from eight years earlier that prohibited government-mandated PLAs on federal and federally funded construction projects.

The Obama order states that federal agencies can require a PLA if such an agreement will achieve federal goals in economy and efficiency. According to the terms of the order, non-union contractors may compete for contracts subject to PLAs, but they must agree to the various terms and conditions contained in each PLA in order to win a federal contract and build a project.

A key change from the 2001 order is that by repealing the Bush orders, the Obama order permits recipients of federal funding, such as state, local and private construction owners, to mandate PLAs on public works projects of any size. However, the order does not encourage or mandate recipients of federal assistance to use a government-mandated PLA.

INTERESTINGLY- Donald Trump did not rescind or change the Obama Administration policies on use of Project Labor Agreements.

President Joe Biden's Executive Order 14063 of 28 Feb 2023 revoked Obama's executive order and requires PLAs on federal construction contracts of $35 million or more and established a training strategy for Contracting Officers.Federal Acquisition Regulation 52.222-34 is a contract clause for inclusion in a relevant construction contract, requiring maintenance of a PLA for the duration of the project.

Not stopping there, the Biden Administration is strongly pushing states local municipalities and even private entities to require use of PLAs on Federally funded or non Federally funded and privately funded construction projects.

As of March 2023, through legislation or by executive order issued by the state governor, 25 states have active laws banning government-mandated project labor agreements on state, state-assisted and/or local taxpayer-funded construction projects.

State policies restricting government-mandated PLAs were repealed in four states following Democratic party takeovers in those state governments.

Ten states have executive orders, or have enacted legislation authorizing or encouraging the use of PLAs on public projects.