The Court of Federal Claims has issued an important decision establishing that offerors will be held accountable for making inaccurate representations in proposals. According to the Court’s decision in GTA Containers, Inc. v. United States, No. 11-606C (Fed. Cl. Feb. 22, 2012) [pdf], proof that an offeror made a misrepresentation in its proposal is sufficient to sustain a bait-and-switch protest if the agency relied on the misrepresentation.

The case involved a commercial item procurement of water and fuel systems for the Marine Corps. The awardee represented in its proposal that it would use a certain supplier to provide specific component parts of the water and fuel systems. The protester was able to demonstrate from statements the awardee made to the Small Business Administration in a size appeal, however, that this representation was false.

The awardee told the SBA it was using the supplier only to bolster its past performance rating because acknowledging the supplier’s work on the Marine Corps contract would have jeopardized its status as a small business. The court accepted the awardee’s statements to the SBA as true.  Accordingly, it found the proposal representation to be false.

The record also showed that the agency relied upon the (false) representations about the supplier by giving technical credit to the awardee based on its use of the supplier. The court concluded that this was a bait and switch. The court sustained the protest because the protester met its burden of showing a clear violation of an applicable procurement regulation.

Subjective impact not required

The GTA Container case is notable for the standard of proof it applies to bait-and-switch protests. The court applied other Court of Federal Claims precedents, Blue & Gold, Fleet, L.P. v. United States, 70 Fed. Cl. 487, 495 (2006), Sealift, Inc. v. United States, 82 Fed. Cl. 527 (2008), and Planning Research Corp. v. United States, 971 F.2d 736 (Fed. Cir. 1992), for the proposition that establishing a bait-and-switch requires only proof of objective falsehood at the time the proposal was submitted.

The court rejected the agency’s argument that the misrepresentation did not subjectively affect the procurement because the agency was unaware of the misrepresentation at the time of award. According to the decision in GTA Container, it does not matter that the agency learned of the falsehood only after the award. The bait-and-switch theory protects the integrity of the procurement system because the agency is entitled to rely on the facial validity of representations in proposals.

The court also rejected other cases, like Northrop Grumman Corp. v. United States, 50 Fed. Cl. 443 (2001), that would require protesters seeking to establish a bait-and-switch to prove that misstatements in proposals were “willful and egregious.” The decision in GTA Container concludes that no such additional showing is required.