December 2021 Bid Protest Roundup

• Published date: 13 January 2022
• Subject Matter: Government, Public Sector, Government Contracts, Procurement & PPP
• Law Firm: Morrison & Foerster LLP
• Author: Roke Iko

This month's Law360 Bid Protest Roundup focuses on two Government Accountability Office (GAO) decisions and one recent Federal Circuit decision. These decisions involve (1) the risks of using former government employees in the proposal process, (2) the requirements for an agency's brand-name justification, and (3) whether there is a presumption of prejudice if a protester shows a procuring agency has acted irrationally.

Serco Inc.¹

Contractors can acquire valuable institutional knowledge by hiring former federal government officials. However, they should proceed cautiously when using these officials in obtaining contracts. The GAO has held that when a former government official assists an offeror in a competition for a government contract, the former official is presumed to use any useful, non-public information to which she had access as a government employee.² In Serco, the GAO affirmed this principle and sustained a protest for a $372 million Navy professional support services task order on the basis that the awardee obtained an unfair competitive advantage in its proposal by using non-public information provided by former Navy officials.

The procurement at issue in Serco was a follow-on to a task order first issued in 2014 by the Navy. Under the original task order, the incumbent Serco provided support services to four Navy program offices and interfaced with the offices' program managers by attending weekly meetings and submitting monthly progress reports. These reports included information on Serco's labor rates, employees' names and hours, significant achievements, and problem areas encountered and anticipated.

During this time, Booz Allen Hamilton (BAH), which had competed for—and lost—the original 2014 task order, began preparing for the anticipated follow-on contract. In 2018, BAH recruited and hired two former Navy program managers through its subcontractor agreements. These program managers assisted BAH in its proposal preparation for the follow-on contract and revealed some of Serco's performance issues on the 2014 task order, including that the company was "not providing consistent delivery" and "doesn't do cyber well."³

In July 2019, the Navy issued a solicitation for a follow-on to the 2014 task order. Serco and BAH were the only offerors. On February 5, 2021, the Navy awarded the task order to BAH because of its proposal's strengths, including "manpower, personnel, and training" and "data analytics."⁴

On February 23, 2021, Serco filed a protest, asserting that the Navy failed to consider BAH's unfair competitive advantage through its access to non-public, competitively useful information from the Navy officials. The Navy stated it would take corrective action, and GAO dismissed the protest. However, the Navy ultimately "found no evidence that current or former government employees provided BAH with unequal access to non-public competitively useful information that would have provided it with an unfair competitive advantage."⁵ Serco filed another protest, asserting that BAH gained an unfair advantage in the procurement by hiring the Navy officials who had unfettered access to non-public information regarding Serco's staffing, costs, technical approach, and past performance. Serco listed several supporting factors including:

• Former Navy employees' access to Serco's proprietary information such as labor rates and employee names, positions, and hours as...