Should the Agency Have Considered the Awardee’s Past Bankruptcy When Making the Responsibility Determination?

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The protester challenged the responsibility determination, arguing the agency ignored the awardee’s past bankruptcy. The COFC rejected the argument, reasoning that a bankruptcy does not necessarily preclude an agency from finding an offeror responsible. 

Navarre Corporation v. United States, COFC No. 22-1037 
  • Definitive Responsibility Criteria – The protester alleged the government improperly waived definitive responsibility criteria when it awarded the contract to a company that lacked the financial capability to perform. But FAR 9.104-2 requires that any definitive responsibility criteria must be expressly defined in the solicitation. Here, the solicitation did not identify any special standards for assessing a potential offeror’s responsibility. Thus, the solicitation did not set forth definitive responsibility criteria, so the agency had not improperly waived those criteria. 
  • Responsibility Determination – The solicitation didn’t contain definitive responsibility criteria, so the court examined the responsibility determination under the FAR’s general responsibility standards. The court found the agency had assessed the awardee’s financial viability using a Duns and Bradstreet report, CPARS, FedDataCheck, and other contract responsibility data. Based on this information, the agency had reasonably concluded the awardee was responsible.
  • Bankruptcy Filing – The protester contended the agency had erred in not considering the awardee’s previous bankruptcy when assessing responsbility. The court, however, noted that materials concerning the awardee’s bankruptcy were not before the agency when it made its responsibility determination. And even if the materials were before the agency, an agency may still find an offeror responsible even if there’s bankruptcy in their past. 
  • Evaluation of Protester – The protester also objected to the evaluation of its own quotation. The protester claimed the agency wrongly downgraded its quote for a communications requirement. But the court found the protester had not provided any substantive elaboration to support the argument. 

The protester is represented by William M. Weisberg of the Law Office of William M. Weisberg. The intervenor is represented by Sarah Christine Reida of Legal Meets Practical, LLC. The government is represented by Joshua A. Mandelbaum of the Department of Justice. 

–Case summary by Craig LaChance, Senior Editor