LabCorp Sues U.S. Over $31.7 Million Contract

Laboratory Corp. of America Holdings sued the U.S., saying a $31.7 million contract for laboratory-testing services was improperly rejected by the Department of Veteran Affairs.

The department “erroneously programmed” a computer system to stop accepting bids an hour before a publicized deadline, LabCorp (LH) said in the complaint filed yesterday with the U.S. Court of Federal Claims in Washington.

“Because the VA refused to accept bids by any other means, such as e-mail, fax, or hand-delivery, LabCorp was divested of all opportunity to submit its proposal prior to the close of the solicitation,” according to court papers.

Jo Schuda, a spokeswoman for the VA, didn’t immediately return a phone call and e-mail seeking comment on the complaint.

Bids were supposed to be submitted on May 31 by 2 p.m. Central Standard Time, a deadline the company had confirmed with a VA contract specialist, LabCorp said. LabCorp attempted to put in its bid 57 minutes before the deadline and was rejected because the VA’s system stopped accepting bids at 2 p.m. Eastern Time, according to the complaint.

In June, LabCorp filed a pre-award protest with the Government Accountability Office challenging the VA’s refusal to accept its bid. The GAO denied the protest on Sept. 13, prompting the complaint.

LabCorp, based in Burlington, North Carolina, is asking a judge to bar the VA from evaluating proposals or proceeding to award a contract until it has accepted the company’s bid.

The case is Laboratory Corp. of America v. U.S., 12-622, U.S. Court of Federal Claims (Washington).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Sophia Pearson in Philadelphia at spearson3@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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