A string of recent decisions have found the U.S. Government
Accountability Office (GAO) struggling with the impact of corporate
transactions on pending proposals. See FCi Federal, Inc.,
B-408558.7, B-408558.8, Aug. 5, 2015, 2015 CPD ¶ 245
(overturning award where "as a result of the sale . . . the
original proposal, upon which the award decision was based, no
longer reflects the intended approach to performance");
see also Wyle Labs., Inc., B-408112.2, Dec. 27, 2013, 2014
CPD ¶ 16 (overturning award where the awardee had recently
engaged in a corporate reorganization); IBM U.S. Federal,
B-409806 et al., Aug. 15, 2014, 2014 CPD ¶ 241
(noting that a corporate reorganization did not appear "to
have any significant cost or technical impact on performance of the
requirements"). These decisions have led to significant
uncertainty as to what best practices should be adopted by
contractors in significant transactions.
Continuing this confusion is yet another case where an
apparently successful offeror has lost its contract because of a
transaction. Earlier this week, the National Nuclear Security
Administration ("NNSA") rescinded the award of a nearly
$5 billion contract to a Lockheed Martin company—Nevada Site
Science Support and Technologies Corporation
("NVS3T")—after learning that the company had been
sold to Leidos Innovations Corporation after submission of the
The NNSA stated that the solicitation required offerors to
notify it of any changes in ownership, which NVS3T failed to do. In
a public statement, NNSA explained that the award had been premised
on the bid as submitted, which identified NVS3T as a wholly owned
subsidiary of Lockheed Martin, not Leidos. According to the NNSA,
the "change in ownership raises substantial questions about
the information in the NVS3T proposal, which could significantly
impact the evaluation of the proposal and award decision." The
NNSA stated that a new award decision would be made based on
reconsideration of all other offers received in response to the
This case raises yet another warning sign for firms that engage
in significant transactions while proposals are pending; in
addition to navigating the GAO's case law, they may also have
RFP-specific issues to address.
Because of the generality of this update, the information
provided herein may not be applicable in all situations and should
not be acted upon without specific legal advice based on particular
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