Thursday, March 16, 2017

Some Claims Must Be Raised Before Contract Award

The U.S. Court of Federal Claims dismissed a company's OCI (Organizational Conflict of Interest) claim related to the award of a contract by the Army because it effectively waived its claim by not raising it before contract award.

A party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest action (Blue & Gold Fleet L.P. v US, 492 F. 3d, 1308, 1313). The Federal Circuit adopted this rule to prevent contractors from taking advantage of the government and other bidders by sitting on their rights during the bidding process, which leads to expensive post-award litigation. The waiver rule applies broadly in bid protests to all situations where the protesting party had the opportunity to raise its claim before the award of the contract.

In the present case, The Concourse Group alleged that the Army and the incumbent's "unusually close" relationship gave rise to multiple OCI claims. Despite the incumbent status, Concourse claimed that it was unaware of the unusually close relationship until after contract award. The Court wasn't convinced by Concourse's alleged lack of knowledge. The Court found that Concourse knew or should have known of the incumbent's role well before contract award, noting:

  1. The Court found it unconvincing that Concourse was ignorant of or unable to access two public documents it references in its complaint before contract award
  2. The incumbent filed three separate pre-award protests at the GAO before contract award, thereby publicly displaying its interest in the procurement and putting Concourse on notice of its possible involvement
  3. Concourse admitted in its complaint that it was aware of the incumbent's direct participation with the prime contractor bidder prior to contract award and did not raise an OCI claim in its pre-award protest at the GAO.

In summary, both the public documents and the incumbent subcontractor's interest in the procurement were easily recognizable or obvious facts that make them subject to the Blue and Gold test. Based on that, the Court dumped the challenge. 

Besides the "Blue and Gold" test, the other salient point in all of this is "known or should have known". It is not necessarily a defense to have not known the facts if the facts are obvious and the protester should have known them.

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