Agency Can Reject a Bid Due to the Appearance of Impropriety. But Does the Agency Need to Show the Impropriety Impacted the Procurement?

The protester hired a former agency official. The agency found this official had been involved in the procurement so the hiring created an appearance of impropriety. The protester argued the agency needed to show more than an appearance; it needed to show the hiring had an apparent impact on the procurement. The COFC, however, said the mere appearance of impropriety was enough to disqualify the protester. 

Raytheon Company, v. United States, COFC. No. 23-1657C 

• Navy Disqualifies Raytheon – The Navy issued a solicitation for the development of countermeasures against radar-guided missiles. Raytheon submitted a proposal. The Navy, however, disqualified Raytheon due to an appearance of impropriety. Raytheon had hired a former Navy official. This official had worked extensively on the anti-missile program. The Navy found this official had access to proprietary and source-selection information. The official had not been forthcoming about his involvement in the program to the Navy or to Raytheon. Raytheon filed a protest with COFC objecting to its disqualification. 
• Standard for Disqualification – The FAR and Federal Circuit precedent allow an agency to disqualify a bidder for an appearance of impropriety. Raytheon, however, argued that mere appearance was not enough. Rather, Raytheon contended the agency also needed to show the impropriety tainted the procurement process—that the impropriety also had an apparent impact on the procurement. But the court rejected the argument. Nothing in the Federal Circuit caselw indicates the agency must find an actual impact on the procurement. 
• Single Program – Raytheon contended the agency erred in viewing the anti-missile program as a single program. Raytheon reasoned the former official had worked with the Navy on the research part of the program, but that didn’t necessarily mean it was improper for him to work with Raytheon on the development part of the program. But the court found the agency rationally treated the program as a single program with multiple procurement phases. 
• Reasonableness of Agency Determination – The court found the Navy had not abused its discretion in finding an appearance of impropriety. The former official had significant involvement in the research component of the program and helped define the requirements for the development portion. The official had not recused himself from work on the program while he was negotiating with Raytheon. Indeed, the court noted the official had likely violated his non-disclosure agreement with the government when he negotiated with Raytheon. The fact that the official breached the non-disclosure was enough to create an appearance of impropriety. 

The protester is represented by Kevin P. Connelly, Jeffrey M. Lowry, and Kelly E. Buroker of Vedder Price, P.C. The intervenor, BAE, is represented by Scott M. McCaleb, Jon W. Burd, Sarah B. Hansen, and W. Benjamin Phillips, III of Wiley Rein LLP. The government is represented by Steven M. Mager, Brian M. Boynton, Patricia M. McCarthy, and Douglas K. Mickle of the Department of Justice, along with Theresa M. Francis and Cristina Costa De Almeida of the Navy. 

–Case summary by Craig Lachance, Editor in Chief