GAO Won’t Resolve Alleged Corporate Espionage Dispute

In a recent GAO bid protest, IBM Corp. accused a subcontractor of giving its proposal to a competitor.

GAO dismissed the accusation, explaining that at its core, alleged corporate espionage is a disagreement between two parties, not a contractor and the federal government and therefore not an appropriate matter for resolution in a bid protest.

The protest itself was over the Department of Homeland Security Transportation Security Administration’s task order award to Accenture Federal Services, LLC under the Enterprise Acquisition Gateway for Leading Edge Solutions (EAGLE) II contract. The task order award asked Accenture to supply information technology support services to the TSA.

The issue, according to IBM—in this and a previous protest—was that an employee of one of IBM’s subcontractors had accessed a restricted TSA website and given IBM’s bid proposal to Accenture.

IBM argued that this was a violation of the Procurement Integrity Act and that an adequate investigation would have eliminated Accenture from the competition.

In response to IBM’s first protest, TSA took corrective action and agreed to conduct an investigation. The investigation included reviewing the contents of the employee’s laptop and comparing IBM’s proposal to Accenture’s to see if there was any evidence of IBM’s corporate secrets.

GAO’s decision does not detail the results of the investigation, but does say that TSA turned the results over to the U.S. Attorney’s Office for the District of Maryland and it declined to prosecute. Thereafter, the contracting officer concluded that there was no evidence a violation of the Act occurred. TSA again selected Accenture for award.

IBM protested again. Specifically, it claimed that this employee, identified in the decision only as John Doe, was a network architect who misappropriated information including team member identities and other non-public information such as IBM’s software development and transition approach.

IBM claimed that Accenture knew John Doe was under a non-disclosure agreement and that it violated the Procurement Integrity Act when he allegedly provided the information. IBM argued Accenture should be kept out of the competition.

TSA and Accenture both argued that GAO should dismiss the protest because the Procurement Integrity Act requires improper conduct by the government or current or former government personnel—not the case here.

GAO ultimately agreed. It said, “the allegations involve a private dispute between private parties that is not for our consideration as part of our bid protest function.”

Further, “To the extent John Doe breached his [non-disclosure agreement] with IBM or other obligations to IBM or IBM’s subcontractor, and Accenture may have committed a tort in inducing such a breach or accepting such allegedly misappropriated information, these matters present private disputes between private parties, which we do not consider as part of our bid protest function.”

Because “IBM’s protest fails to allege any wrongdoing on the part of the government,” it “fails to state a legally sufficient allegation of a [Procurement Integrity Act] violation,” GAO said.

In other words, corporate espionage typically is none of GAO’s concern.