Court Disqualifies Awardee for Misrepresenting Its Past Performance

In an episode of Seinfeld's sixth season, Jerry tells his police-officer girlfriend that he's never seen Melrose Place. Suspicious, the girlfriend pulls a Maury Povich and submits Jerry to a lie detector. Jerry fails spectacularly, despite test-beating advice from "one of the most deceitful, duplicitous, deceptive minds of our time," namely, a certain George Costanza.

Jerry's misrepresentation costs him a relationship, but that's pretty much a weekly occurrence in Seinfeld. In federal contracting, however, a mispresentation can be much costlier. As a recent case at the Court of Federal Claims demonstrates, "the law requires disqualification" when an offeror makes a material mispresentation in its proposal--even if the agency, for whatever reason, says "eh, we're cool with it."

The Court's decision in Global K9 Protection Group, LLC v. United States, No. 23-210 (Dec. 27, 2023) involved a Postal Service solicitation seeking to award a contract for airport mail package explosive detection services. After a series of previous protests and legal challenges (which are recounted in the decision, but I'll skip here for brevity), the USPS issued an award to K2 Solutions, Inc.

Global K9 Protection Group, LLC filed a bid protest challenging the award. GK9 contended the K2 should be disqualified because K2 had misrepresented its previous subcontract work for GK9.

For example, GK9 alleged that K2 had falsely stated that it supported GK9 with 78 "teams" when, in fact, K2 had provided "approximately 66 individuals." Additionally, GK9 contended that K2 falsely asserted that it met all contractual requirements under its subcontract with GK9 when in fact K2's performance had been deficient in several respects. GK9 provided more than 200 pages of evidence in support of its contentions, including a sworn declaration together with "the subcontract agreement between GK9 and K2, K2 personnel shift attendance logs, and email communications addressing the alleged misrepresentations."

The Court wrote that "[w]hen a bidder makes a material misrepresentation" in its proposal, "the law requires disqualification." To establish a material misrepresentation, a protester must demonstrate two things: first, that the awardee "made a false statement," and second, that the agency "relied on that statement" in selecting the awardee's proposal.

Applying this law to K2, the Court first determined that the documentation provided by GK9 "clearly establishes falsity in K2's proposal related to past performance." Comparing K2's actual performance to the solicitation's requirements, the Court then held that "[w]ithout its misrepresentations, K2 completely lacked relevant successful past performance" and that the USPS relied on K2's misstatements in making it award decision.

The Court ruled that, despite the USPS's apparent desire to retain K2, the company must be disqualified. The Court wrote that "the public has an interest in honest, open, and fair competition in the procurement process." In this case, the competition was "tainted by K2's material misrepresentation" and K2 should not be allowed to receive an award. The Court granted a permanent injunction disqualifying K2.

In another classic Seinfeld episode (also from Season 6), George and Elaine are banned from the "Soup Nazi's" restaurant. The proprietor's famous catchphrase is similar to what a contractor can expect if it includes falsehoods in its proposal: "no contract for you!"

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Boring but important disclaimer: The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.