In an unusual case, the Government Accountability Office sustained a protest alleging that an acquisition services contractor had acted unilaterally to prevent an offeror from participating in a Department of State competition.  The decision serves as a reminder that procuring agencies bear responsibility for the actions of acquisition services contractors.

The Department of State sought to procure first aid kits and other medical supplies as a small business set-aside through reverse-auction procedures.  The procurement was conducted by FedBid, an online acquisition services provider.  The protestor, Latvian Connection, LLC, alleged that FedBid precluded it from submitting an auction bid by barring the protestor from accessing the auction website.  Relying upon a provision in the website’s terms of use, FedBid suspended the protestor’s account on the basis that “Latvian Connection has taken actions to repeatedly and purposely interfere with FedBid’s business relationships.”  The precise nature of the dispute between FedBid and Latvian Connection was not developed in GAO’s public decision.

GAO held that in barring access to the website, FedBid had made a de facto non-responsibility determination with regards to Latvian Connection, and that as a small business, any non-responsibility determination regarding Latvian Connection required a referral to the Small Business Administration.  GAO rejected the Department of State’s argument that FedBid acted unilaterally, holding that the Department of State, through FedBid, precluded Latvian Connection from competing on the basis of integrity.

Latvian Connection enjoyed little direct benefit from the decision, as the Department of State had already overridden the stay of contract award based on urgent and compelling circumstances and performance was complete.  Moreover, the approximate value of the procurement was merely $5,000.  However, this decision may serve to remind procuring agencies that agencies must closely monitor the actions of acquisition services contractors because the actions of those contractors may well be imputed to agencies in the protest context.

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Photo of Nooree Lee Nooree Lee

Nooree advises government contractors and financial investors regarding the regulatory aspects of corporate transactions and restructurings. His experience includes preparing businesses for sale, negotiating deal documents, coordinating large-scale diligence processes, and navigating pre- and post-closing regulatory approvals and integration. He has advised on…

Nooree advises government contractors and financial investors regarding the regulatory aspects of corporate transactions and restructurings. His experience includes preparing businesses for sale, negotiating deal documents, coordinating large-scale diligence processes, and navigating pre- and post-closing regulatory approvals and integration. He has advised on 35+ M&A deals involving government contractors totaling over $30 billion in combined value. This includes Veritas Capital’s acquisition of Cubic Corp. for $2.8 billion; the acquisition of Perspecta Inc. by Veritas Capital portfolio company Peraton for $7.1 billion; and Cameco Corporation’s strategic partnership with Brookfield Renewable Partners to acquire Westinghouse Electric Company for $7.8+ billion.

Nooree also counsels clients navigating the Foreign Military Sales (FMS) program and Foreign Military Financing (FMF) arrangements. Nooree has advised both U.S. and ex-U.S. companies in connection with defense sales to numerous foreign defense ministries, including those of Australia, Israel, Singapore, South Korea, and Taiwan.

Over the past several years, Nooree’s practice has expanded to include advising on the intersection of government procurement and artificial intelligence. Nooree counsels clients on the negotiation of AI-focused procurement and non-procurement agreements with the U.S. government and the rollout of procurement regulations and policy stemming from the Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence.

Nooree maintains an active pro bono practice focusing on appeals of denied industrial security clearance applications and public housing and housing discrimination matters. In addition to his work within the firm, Nooree is an active member of the American Bar Association’s Section of Public Contract Law and has served on the Section Council and the Section’s Diversity Committee. He also served as the firm’s Fellow for the Leadership Council on Legal Diversity program in 2023.

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