IBM loses argument over Procurement Integrity Act violation claim

This is one of the more intriguing bid protests I’ve read in recent times.

Let’s take it in the worst light possible.

IBM says an employee at one of their subcontractors gave bid and proposal information to Accenture, which helped the latter win a $47.8 million contract to support the Transportation Security Administration's Secure Flight system that pre-screens air travelers against "no-fly" watchlists.

IBM then files a protest and claimed Accenture violated the Procurement Integrity Act that includes restrictions on distributing potentially sensitive information in procurements. IBM said Accenture should be excluded from the competition.

Seems pretty straight-forward right?

But the Government Accountability Office ruled against IBM and denied their protest. Accenture and TSA argued that there was nothing in IBM’s protest that showed any improper conduct or involvement on the agency's part.

Since TSA wasn’t a party to any of the alleged wrongdoing, GAO says there was nothing for them to rule on.

GAO writes: “The crux of their arguments is that IBM’s allegations, even if proven, are insufficient to establish a violation of the PIA where the protester does not allege any improper conduct or involvement on the part of the government.”

There is some question in the GAO decision on whether Accenture realized that they were given information they shouldn’t have received.

But GAO's argument is that even if they did know, it didn’t matter. The government did nothing wrong, so the dispute isn’t in GAO’s jurisdiction.

IBM filed an earlier protest to first raise the allegations after TSA made an award to Accenture. TSA pulled the award back to investigate and determined that there wasn’t a problem.

When Accenture won the contract a second time, IBM filed a new protest and argued that the TSA investigation wasn’t adequate and the conclusion wasn’t reasonable.

Here again, GAO sided with TSA.

“Though the protester disagrees with the contracting officer’s judgment regarding Accenture’s responsibility, that disagreement does not provide a basis to challenge the contracting officer’s affirmative responsibility determination,” GAO wrote.

But in reading the decision, it is apparent to me that GAO thinks something did happen that was improper. But their conclusion is that TSA didn’t do anything improper.

GAO’s decision is sprinkled with the terms “private parties,” and in this sentence GAO seems to say that IBM needs to take Accenture to court if they want any remedy:

“Accenture may have committed a tort in inducing such a breach or accepting such allegedly misappropriated information, these matters present private disputes between private parties, which we do not consider as part of our bid protest function.”

If IBM takes their case against TSA to the U.S. Court of Federal Claims, the lawsuit is likely to fail given the case GAO describes in their decision.

GAO cites the case of Geo Group where an employee secretly owned another company. Geo Group and his company competed for the same contract and the employee shared Geo Group information with his other company. His company eventually won the contract.

Geo Group protested to GAO and lost and then lost again at the Court of Federal Claims.

Just like the IBM-Accenture case, there was no evidence that the government did anything wrong.

It’s a dispute between two private parties and has nothing to do with the government.

Will IBM sue Accenture and claim damages? I don’t know. IBM didn’t respond to a request for comment.

GAO doesn’t rule on whether or not Accenture did anything wrong or even made use of the information from the subcontractor.

But TSA conducted an internal investigation to determine if the IBM information was incorporated into Accenture’s proposal. The U.S. Attorney’s Office for the District of Maryland requested the investigation’s report and decided not to take any criminal action.

I’ve reached out to Accenture for comment, but it sounds like no crimes were committed.

But that doesn’t mean IBM can’t take a civil action against Accenture. We’ll have to wait and see on that.