Failing to keep a proposal current and accurate all the way through the solicitation process can cost an offeror the contract, according to a recent decision from the U.S. Court of Federal Claims (COFC). 

When the Department of Defense Washington Headquarters Services (WHS) requested quotes on a contract to provide information technology support services, the personnel and key personnel resumes submitted with each proposal, including the position Deputy Program Manager (DPM) were referred to as “essential to the work.” The agency warned offerors that their proposals could be rejected unless there was a firm commitment from the persons that were listed in their proposal.   

The agency rejected the proposal from NetCentrics Corp on this basis. The firm listed an individual identified by the court as “Mr. A” as its proposed DPM and promised that his availability to work on the contract was “immediate.”  NetCentrics continued to propose Mr. A in its final proposal revision (FPR) even though he had left NetCentrics about a month earlier. In part because of Mr. A’s  presence on the NetCentrics FPR, NetCentrics won the contract. 

After award, however, a competitor learned from Mr. A’s LinkedIn profile that Mr. A was not available to perform “immediately” and successfully protested NetCentrics’s award to the Government Accountability Office (GAO). After the agency rescinded its award to NetCentrics and disqualified NetCentrics from the competition, NetCentrics protested its exclusion unsuccessfully to GAO and then to the COFC. Both forums concluded that the agency had acted reasonably in disqualifying NetCentrics.

According to the Court, “to protect the integrity of the procurement process, an agency may disqualify a proposal that contains a material misrepresentation.” The two components of a material misrepresentation are (1) a false statement and (2) agency reliance on the false statement to favorably evaluate the proposal. 

These two requirements were met in this case. First, the agency “concluded that NetCentrics’s final offer contained several related misrepresentations” including that Mr. A was a current employee when the NetCentrics FPR was submitted and that he was immediately available to perform on the contract.  Second, the misrepresentations were “material because the agency had relied upon them in awarding the contract to NetCentrics.” As a result, the agency had acted reasonably in excluding NetCentrics from the competition.

The decision makes an especially important additional point. NetCentrics had argued that previous court decisions had added a third element: that an offeror had to make the material misrepresentation with the intent to deceive, which was not the case here. The Court acknowledged those decisions, but said they were not the only basis for disqualifying proposals containing material misrepresentations: these decisions did not mean that an agency “lacks the discretion to disqualify a proposal that contains a material misrepresentation that an offeror included inadvertently (as opposed to intentionally) in its proposal.” Offerors have a duty to submit a proposal “that is, to the greatest extent possible, an accurate one. An offeror that inadvertently includes a material misrepresentation in its proposal concerning the availability of its proposed key personnel shirks this obligation and also undermines the agency’s ability to make well-reasoned procurement decisions that serve the public interest.” In other words, inadvertent as well as intentional material misrepresentations can be fatal to an offeror. NetCentrics Corp. v. United States, U.S. Court of Federal Claims No. 19-839C, September 24, 2019.

Berenzweig Leonard  is teaming up with  Red Team Consulting  for a monthly newsletter featuring reports on recent contract decisions, recent upcoming contracts, key protest decisions, events, Words of Wisdom, and more. This post was published in the October 2019 newsletter. To sign up for our govcon newsletters, please email [email protected].

Terry O’Connor is a Partner at Berenzweig Leonard. Terry and Stephanie Wilson   lead the firm’s  Government Contracts practice. Terry can be reached at  [email protected].