You know what they say about when you assume. Unfortunately, one contractor recently discovered that taking an assumed business name can have serious repercussions for proposal eligibility.
Gulfnet Communications Company, W.L.L., B-417516 (June 21, 2019), involved a Defense Information Systems Agency (DISA) procurement for fiber optic transmission services between two airbases in the United Arab Emirates. Only contractors that had previously been awarded basic agreements by the Defense Information Technology Contracting Organization (DITCO) would be eligible to compete for award. Offerors that had not been awarded a basic agreement were instructed to contact an appropriate DITCO before submitting a bid.
Gulfnet is a telecommunications provider based in Kuwait City, Kuwait. It has held a basic agreement with DITCO since 2012. Since entering into the basis agreement, Gulfnet has been developing “B.Online” as an assumed business name.
In August of 2018, Gulfnet approached DISA about modifying its basic agreement to include its assumed name, B.Online. DISA responded that Gulfnet would need to register B.Online in the System for Award Management (SAM) and execute a change of name agreement before B.Online could be added to the basic agreement. DISA further warned Gulfnet to only use its registered name when submitting bids until the necessary registrations for B.Online had taken place.
Gulfnet never registered B.Online in SAM, nor executed a change of name agreement with DISA.
In March 2019, Gulfnet submitted a quote in response to the solicitation and used its assumed name, B.Online. After reviewing the quote, DISA determined that B.Online did not hold a basic agreement and rejected the quote.
Following its rejection, Gulfnet protested to GAO arguing that its proposal was unreasonably evaluated. In response, DISA raised a deft procedural defense.
GAO’s jurisdiction over bid protests is governed by the Competition In Contracting Act (CICA), as implemented by the GAO’s procedural regulations. As relevant here, only “Interested Parties” are eligible to protest awards, which GAO’s regulations define as “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract.” 4 C.F.R. § 21.0(a)(1).
DISA argued Gulfnet was not an interested party because it did not submit a quotation in response to the solicitation. While Gulfnet argued that it did respond under the assumed name of B.Online, DISA explained that there was nothing within the record to demonstrate B.Online would be bound by terms of the basic agreement as it had not executed such a contract with DISA.
GAO agreed with DISA that Gulfnet was not an interested party. As GAO explained, “[t]he central concern in every case where there is doubt regarding which firm is the actual vendor or offeror is the risk that there will be no party that is bound to perform the obligations of the contract.” Since there was nothing in the record committing Gulfnet to performing the contract even if its protest was sustained, GAO concluded Gulfnet was not an interested party. Consequently, Gulfnet’s protest was dismissed.
Gulfnet demonstrates how federal procurement law and strategic business initiatives can conflict, disastrously. While rebranding under an assumed name is a fairly common corporate procedure, there was nothing legally obligating the business entity with the assumed name to comply with DISA’s basic agreement. Consequently, the contractor’s bid was rejected. The circumstance in Gulfnet is precisely why federal contractors must remain vigilant about all aspects of their proposals in order to remain eligible for awards.
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