Protester Said Agency Erred in Finding It Was Not a Danish Company. Did GAO Find Something Rotten in an International Agreement Between the U.S. and Denmark?

90
S-F | Shutterstock

Pursuant to an international agreement, the solicitation limited the competition to Danish or Greenlandic companies. The incumbent was registered in Denmark but was a subsidiary of a U.S.-owned company. The agency determined that the incumbent no longer qualified as a Danish source under new definitions agreed to by the U.S. and Denmark. The incumbent objected to the determination believing it still qualified as a Danish source under a previous international agreement. But GAO basically said, you can eat Smørrebrød, watch Borgen,[i] and love Mads Mikkelson but as long as you’re a subsidiary of a U.S. company, you ain’t Danish.

Vectrus Services A-S., GAO B-420527, B-420527.3

Background

The U.S. and the Kingdom of Denmark entered a Defense of Greenland Agreement in 1951. That agreement created Thule Air Base in Greenland, which provides early warning of missile launches and arctic research. In 1991, the U.S. and Denmark entered a memorandum of understanding, which provided that the U.S. had to acquire goods and services for the Thule Air Base from Danish/Greenlandic sources.

In 2014, the Air Force awarded a contract for maintenance at Thule Air Base to a predecessor of Vectrus Services A-S. Vectrus was registered in Denmark as required by the 1991 agreement. But Vectrus was a wholly owned subsidiary of a U.S. company.

The award to Vectrus did not sit well with the Kingdom of Denmark, which believed that Vectrus did not really qualify as a Danish company. As a result, the U.S. and Denmark executed a diplomatic note that redefined a Danish company. As of 2020, to qualify as Danish/Greenlandic, more than 50% of a company’s equity had to be owned by Danish or Greenlandic individuals.

In 2021, the Air Force issued a new RFP for maintenance at Thule Air Base. Vectrus filed a protest with GAO alleging that the Air Force unreasonably concluded that Vectrus was ineligible because it no longer qualified as a Danish company.

Legal Analysis

Vectrus argued that the 1991 agreement between the U.S and Denmark was still operative. Vectrus contended it still qualified as a Danish company under the 1991 agreement, but the Air Force had adopted a new definition of a Danish company that was not required by the 1991 agreement.

GAO was not persuaded by Vectrus’s argument. The 1991 agreement required the U.S. to award contracts at the Thule Air Base to Danish/Greenlandic companies, but the agreement did not define the eligibility criteria for a Danish or Greenlandic source. The U.S. and Denmark revised the eligibility criteria for a Danish source when the executed a diplomatic note. While Vectrus may have qualified as Danish company when it was awarded the contract in 2014, it no longer satisfied the new criteria. The Air Force property concluded that Vectrus was ineligible.

Vectrus is represented by J. Scott Hommer, III, Rebecca E. Pearson, Christopher Griesedieck, Taylor A. Hillman, Lindsay M. Reed, and Alexander Koff of Venable LLP. The intervenor, Greenland Contractors, is represented by Anuj Vohra, James G. Peyster, Rina M. Gashaw, and William B. O’Reilly of Crowell & Moring, LLP. The agency is represented by Michael J. Farr, Erika Whelan Retta, Colonel Frank Yoon, and Katherine A. Illingworth of the Air Force. GAO attorneys Marry G. Curcio and John Sorrenti participated in the preparation of the decision.

[i] Seriously, if you haven’t seen it, check out Borgen on Netflix. It’s an excellent prestige political drama. A centerpiece of the Golden Age of Danish television.

Vectrus Services