Does the Purchase of Contract Assets Count as an Organizational Change?

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In this bid protest, the solicitation required offerors to disclose recent organizational transactions. The awardee had purchased the contract assets of another government contractor. The protester argued the awardee had failed to disclose this transaction as required by the solicitation. But GAO found that the solicitation only required the disclosure of major transactions, like a merger or acquisition. The mere purchase of contract assets was not the type of change that offerors needed to disclose.

NOVA Dine, LLC, GAO B-420454, B-420454.2

The Defense Information Systems Agency (DISA) issued an RFP for an IDIQ contract for technologies refreshment and transition operations to future networks. After receiving proposals and conducting several rounds of discussions, DISA awarded the contract to Competitive Range Solutions, LLC (CRS).

An unsuccessful offeror, NOVA Dine, LLC, filed a GAO protest. Among other protest arguments –e.g., misleading discussions, disparate evaluation — which GAO rejected, NOVA argued that DISA had failed to properly assess an organizational change affecting CRS.

The solicitation noted that many contractors are acquired or otherwise merged with other companies while performing government contracts. As a result of these transactions, it may not be clear which entity performed the contract, which in turn makes it difficult for an agency to assess the relevancy of these contracts as part of a past performance evaluation. To facilitate the evaluation of past performance, the solicitation required offerors to disclose recent organizational changes.

CRS had purchased the assets of another company’s contract after the company had been removed for cause. NOVA alleged that CRS failed to disclose this transaction as required by the solicitation, and that the agency failed to consider it as part of the past performance evaluation. Indeed, NOVA argued, if DISA had considered the purchase, it would have impacted CRS’s past performance rating.

But GAO found that the CRS was not required to disclose this transaction. The solicitation required disclosures of major organizational changes like mergers and reorganizations. The mere purchase of contract assets was not the type of organizational change that offerors needed to disclose or that the agency had to consider.

NOVA is represented by Thomas A. Mason, Francis E. Purcelli, Joseph Berger, and Mona Adabi of Thompson HIne LLP.. The intervenor, CRS, is represented by Cherie J. Owen, William O’Reilly, of Crowell & Moring LLP; Daniel Strouse of Cordatis LLP, and Matthew Schoonover of Schoonover & Moriarty LLC. The agency is represented by Colleen A. Eagan and Vera S. Strebel of the Defense Information Systems Agency. GAO attorneys Alexander O. Levine and Kenneth E. Patton participated in the preparation of the decision.

GAO - NOVA Dine