LabCorp Prevails Over Quest in $250 Million Army Contract

Quest Diagnostics and LabCorp were so eager to provide laboratory services to the U.S. Army that they engaged in a years-long battle to secure the nine-figure contract. When the plug was finally pulled on the legal seesawing early this month, LabCorp was on top. A U.S. Court of Federal Claims ruling issued earlier this month awarded the contract to LabCorp, a decision that pivoted mostly on a picayune scoring process for their bids and how it was calculated and then rescored. Quest was not mollified by this development, particularly since it had been declared the original winner of the five-year, $250 million pact two years ago. That decision, court records say, was based in part by Quest offering the lowest price, one of five categories where the two lab giants were evaluated. But LabCorp filed a protest with the Government Accountability Office (GAO) regarding the original award, resulting in a re-evaluation by the Army. That led to LabCorp wresting the contract from Quest, which in turn filed its own protest with the GAO, claiming LabCorp had too much leeway to make revisions in its bidding. Yet another re-evaluation by the Army did not change the result. Quest then sued in Federal Claims Court. Such legal back-and-forth over a big and exclusive government contract is normal, “and in fact may escalate” in the future, said Jane Pine Wood, a member with the McDonald Hopkins law firm in Massachusetts, as national giants such as Quest and LabCorp find ways to grow flat revenues. How both companies scored in the bidding is unknown, since their results were redacted before the Claims Court released its decision. But the court ruled that in the absence of specific restrictions, either party could make revisions to its bids as it saw fit. Quest was primarily focused on its technical volume capability during the rebidding and did not ask if it could make other changes in its proposal—something LabCorp inquired about and did. Quest also misinterpreted how its current interface with the Army’s electronic health records would be evaluated, according to the ruling. “We are disappointed by this decision. Quest Diagnostics is proud of our record of providing exceptional service to our nation’s military families,” said Quest spokesperson Wendy Bost. “We continue to believe we are the best provider for DOD.” A LabCorp spokesperson did not respond to a request for comment.