The awardee had acquired the protester’s former teaming partner. The protester alleged the awardee had likely received proposal information from the teaming partner in violation of the Procurement Integrity Act (PIA). The PIA doesn’t apply when a firm voluntarily discloses its proposal information. Nevertheless, the protester argued while it had voluntarily disclosed information to its teaming partner, it had not agreed to disclose that information to the awardee. GAO rejected the protester’s argument. Voluntary disclosure remains voluntary even if the recipient is acquired. There’s no exception for corporate transactions.
TRAX International Corporation, GAO B-420361.6
TRAX Corporation and Oasis Systems entered a teaming agreement in anticipatiion of an Army solicitation for testing services. Oasis would help TRAX prepare a proposal. Oasis would then support TRAX as a subcontractor. TRAX provided Oasis with proprietary information while they were working on the proposal.
The Army issued the testing services solicitation in 2020. By that time, however, the TRAX/Oasis relationship had unraveled. Oasis withdrew from the teaming agreement. The parties’ termination agreement prevented Oasis from competing for the contract as part of a different team.
In April 2022, Engineering Research and Consulting (ERC) acquired Oasis. A few months later, the Army awarded ERC the testing services contract.
TRAX notified the Army of a possible PIA violation. TRAX contended it shared proposal information with Oasis, and Oasis likely shared this information with ERC. The Army investigated but found no PIA violation. TRAX filed a protest, alleging the Army’s investigation was unreasonable.
The PIA savings clause provides the Act does not restrict a contractor from disclosing its own proposal information or a recipient for receiving that information. TRAX had voluntarily disclosed its information to Oasis. Nevertheless, TRAX contended the savings clause does not apply to situations involving corporate transactions. TRAX reasoned a contractor may voluntarily disclose proposal information to a company, but if that company is acquired, the contractor never voluntarily disclosed that information to the acquiring company.
But GAO found TRAX was attempting to read a non-existent exception for mergers and acquisitions into the PIA savings clause. Nothing in the plain language of the PIA indicated an exception for corporate transactions. GAO reasoned TRAX was relying on a distinction without meaning. The PIA doesn’t apply to voluntary disclosures. The Act does not suddenly apply if the recipient of that disclosure is acquired by another company. The protest involved a dispute between private parties, not a violation of the PIA.
TRAX is represented by Daniel P. Graham and Tara L. Ward of McDermott Will & Emery LLP. The intervenor, ERC, is represented by J. Hunter Bennett, Evan R. Sherwood, Chanda Brown, and Paul Rowley of Covington & Burling LLP. The agency is represented by Captain Paula F. Barr of the Army. GAO attorneys Kenneth Kilgour and Jennifer D. Wesftall-McGrail participated in the decision.
–Case summary by Craig LaChance, Senior Editor