Alleged Breach Of Teaming Agreement Not A Procurement Integrity Act Violation, Says GAO

A contractor’s alleged breach of its teaming agreement did not provide a basis for the agency to conclude that a Procurement Integrity Act violation had occurred.

According to a recent GAO bid protest decision, even if a teammate misuse voluntarily provided confidential information, the misuse does not violate the Procurement Integrity Act.  Moreover, the GAO considers an allegation regarding the breach of a teaming agreement to be a private dispute, falling outside of the GAO’s bid protest jurisdiction.

The GAO’s bid protest decision in DynCorp International LLC, B-408516, B-408516.2, B-408516.3 (Oct. 28, 2013) involved an Air Force procurement for contractor logistics support.  The solicitation was a follow-on to a contract originally awarded to DynCorp International LLC.  M1 Support Services LP had served as a subcontractor to DynCorp on the incumbent contract.

DynCorp submitted a proposal for the foll0w-on contract.  M1 also submitted a proposal.

During its review of competitive proposals, the Air Force noticed that certain passages in the DynCorp and M1 proposals were identical.  The Air Force pulled DynCorp’s previous proposal from its file and determined that a number of the identical passages came from that proposal.

The Air Force brought the matter to M1’s attention during discussions.  M1 stated that the same individuals who had prepared its proposal had worked on the prior DynCorp proposal.  M1 also provided a copy of its teaming agreement to the Air Force, which provided that information shared between the companies was protected from unauthorized disclosure for a period of three years.  Because more than three years had elapsed, M1 stated that it was fully authorized to use the information.

After reviewing the teaming agreements and obtaining a legal opinion from agency counsel, the Air Force determined that no Procurement Integrity Act violation had occurred.  The Air Force proceeded to make award to M1.

DynCorp filed a GAO bid protest.  DynCorp alleged, in part, that the Air Force had failed to conduct an appropriate Procurement Integrity Act investigation.  DynCorp contended that had the Air Force reasonably reviewed the teaming agreement and subsequent subcontract, it would have been apparent than M1 was prohibited from using the information.

The GAO wrote that as a general matter, the Procurement Integrity Act prohibits a person from obtaining contractor bid or proposal information or source selection information before award of the procurement.  However, the Procurement Integrity Act includes a “savings” provision stating that the Act “does not . . . restrict a contractor fro disclosing its own bid or proposal information or the recipient from receiving that information.”

In this case, the GAO stated, “to the extent that M1 obtained DynCorp’s proprietary information, the record reflects that DynCorp provided it to M1 voluntarily, pursuant to its prior teaming relationship with M1.”  These circumstances “fit squarely within” the savings provision, meaning that no violation of the Procurement Integrity Act occurred, even if the disclosure breached the teaming agreement.

The GAO continued, “[a]t base, DynCorp’s complaint is that M1 failed to abide by the terms of private agreements between the two firms.”  Accordingly, “DynCorp’s allegation constitutes a private dispute not for resolution by our Office and provides no basis for sustaining the protest.”  The GAO denied the protest.

The DynCorp bid protest decision offers three useful lessons.  First, it shows that the Procurement Integrity Act does not apply when a contractor voluntarily discloses proprietary information–even if the recipient allegedly misuses the information.  Second, it demonstrates that the GAO will not decide “private disputes” regarding the enforcement of a teaming agreement or non-disclosure agreement.  And third, it should give contractors reason to think carefully about the scope of their non-disclosure agreements.  Here, even assuming that DynCorp attempts to enforce the teaming agreement in court, M1 may assert that the information was usable after three years. While there is no way to tell whether M1’s defense would prevail, if it does, DynCorp may deeply regret agreeing to the three-year limit.

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