Solicitation Required Offerors to Disclose Adverse Civil Judgments. Was the Awardee Required to Disclose a Judgment from Its Principal’s Divorce Proceedings?
The solicitation in this protest included a FAR provision that required offerors to disclose adverse judgments. The protester alleged the awardee failed to disclose several judgments, including a judgment against one of its principals in divorce proceedings. Alas, GAO found that none of these judgments met the criteria for disclosure under the FAR.
The Logistics Company, Inc., GAO B-419932.3
Background
The Army posted an RFP seeking logistics support services. The RFP included FAR 52.209-7, which requires offerors to disclose any civil judgment against it or its principles within the last five years in connection with a federal contract.
Following an initial award, agency protests, a GAO protest, and a corrective action, the Army awarded the contract to Vanquish Worldwide, LLC. An unsuccessful offeror, The Logistics Company (TLC), protested.
Legal Analysis
TLC contended that Vanquish’s proposal contained material misrepresentations because the company failed to disclose three civil judgment as required by RFP. Specifically, Vanquish omitted (1) a judgment against one its principals resulting from divorce proceedings, (2) an arbitration award arising from a dispute between Vanquish and a subcontractor on a federal contract, and (3) a judgment for breach of a profit sharing agreement between one of Vanquish’s principals and a subcontractor.
GAO found that Vanquish didn’t need to disclose any of these judgments. First, the judgment from the divorce proceeding had no connection to a federal contract and thus was not required to be disclosed under FAR 52.209-7. Second, the arbitration award didn’t need to be disclosed because it was entered more than five years ago. FAR 52.209-7 only requires the disclosure of judgment in the last five years. Third, the judgment for breach of the profit sharing agreement had ultimately been settled without an admission of fault and had been vacated. The FAR only requires disclosure of a compromise that includes an acknowledgement of fault.
TLC further argued that the various judgments against Vanquish should have led the contracting officer to question the company’s responsibility. But GAO reasoned that it had no basis to conclude that the contracting officer had unreasonably ignored these judgments. In fact, the record was clear that the contracting office was aware of and considered the judgments; indeed, they were discussed in the source selection decision. Responsibility determinations are subjective business judgments. GAO saw no reason to question the contracting officer’s discretion.
TLC is represented by Jackson W. Moore, Jr., David L. Hayden, and Amelia L. Serrat of Smith, Anderson, Blount, Michell & Jernigan, LL:. The intervenor, Vanquish, is represented by Michael D. Maloney of Williams Mullen and Todd W. Miller of Miller & Miller, LLC. The agency is represented by Brittany N. Salter and Jonathan Hardage of the Army. GAO attorneys Michael Willems and Edward Goldstein participated in the preparation of the decision.
[pdf-embedder url=”https://staging.pub-k.org/wp-content/uploads/2022/06/GAO-The-Logistics-Company.pdf” title=”GAO – The Logistics Company”]
