In Wyle, the GAO Gives Another Reminder of Risks Associated with Pending Procurements During a Transaction

Although there are often significant rewards associated with transactions among government contractors, the transactions require careful planning and coordination.  Even then, there is a fair amount of risk during the process: the novation process (when required) is discretionary; the seller may have undisclosed violations of procurement law; organizational conflicts of interests may preclude the buyer from pursuing work; etc.  We previously wrote about corporate transactions as bases for protest in our Post-Award Protest Primer.  The recent GAO decision in Wyle Labs reminds us that there is also a risk to pending and future procurements.  In Wyle, GAO held that the agency could reasonably eliminate Wyle Labs from a procurement when, because of a pending novation, the entity actually proposed to perform was its subcontractor (and prospective buyer of its OASIS contract), Grant Thornton.