Latest News - Wolters Kluwer Law & Business

Login | Online Store | Training | Find Rep | Contact Us

Responsibility Determination Could Consider Affiliate's Violations

According to the Court of Federal Claims, a contracting officer had authority to issue a nonresponsibility determination based on the integrity and business ethics of a protester's parent company, despite a separate government agency's decision not to debar the company for ethics violations, because COs are required to make independent determinations of responsibility. The protester challenged the CO's determination it was not a "presently responsible" bidder for a petroleum tanker charter contract, which required a secret facility clearance. The protester was a recently created indirect subsidiary of a shipping contractor that, after pleading guilty to 33 felony counts for environmental violations, agreed to compliance with a plea agreement in lieu of debarment. The protester contended the decision of the lead agency for the debarment proceedings bound all government agencies and estopped the CO's finding of nonresponsibility.
New Limits
According to the CFC, the protester's argument "call[ed] for new limits on the contracting officer's discretion where debarment decisions by other agencies ... are involved." A CO is the point person for any government contract, and the Federal Acquisition Regulation requires a ruling on present responsibility before awarding a contract. Although the FAR required the CO to determine the protester's present responsibility independent of the parent's non-debarment and plea agreement, the CO reasonably concluded the parent's violations impaired the protester's ability to obtain the required security clearance. The CO made the nonresponsibility determination six months after the guilty plea and one month after the debarment report. She therefore concluded insufficient time had elapsed for the parent company to reestablish a record of integrity and business ethics. Although the protester could obtain a facility clearance without its parent having a clearance, this was not the general rule. The CO could not rely on an exception in making a responsibility determination, and she reasonably concluded it was uncertain whether the parent would be able to obtain the necessary clearance. (OSG Product Tankers LLC v. U.S., et al., FedCl, 52 CCF ¶78,971)

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )

Print this Page | About Us | Privacy Policy | Site Map