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COFC: Material Proposal Misrepresentations Need Not Be Intentional

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The U.S. Court of Federal Claims (COFC), in Netcentrics Corp. v. United States, recently upheld an agency’s decision to disqualify an offeror from a procurement based on a perceived material misrepresentation in the offeror’s proposal about the availability of key personnel. In so holding, the COFC made clear that a material proposal misrepresentation may exist, even if there is no intent on the part of the offeror to deceive the agency.

As this author recently noted in a Law360 article about this noteworthy decision, multiple prior COFC decisions have stated that intent to make a false statement is a necessary element of a material proposal misrepresentation. The COFC’s decision in this particular case, however, is a noteworthy departure from those prior COFC decisions, but is generally consistent with the Government Accountability Office’s case law in this area, which holds that a material proposal misrepresentation (or “bait and switch”) may exist where the offeror either “knowingly or negligently” made a material misrepresentation in its proposal.

However, because COFC decisions are not necessarily binding on other COFC judges, it is still possible that another judge on the COFC could, in the future, hold that intent to make a misrepresentation in a proposal is, in fact, a necessary element of a material proposal misrepresentation.

Moreover, because of these diverging COFC decisions in this area, it is possible that the disqualified contractor will appeal the COFC’s decision in this case to the U.S. Court of Appeals for the Federal Circuit. If that were to happen, then any decision by the Federal Circuit on this particular issue would, in fact, be binding on all COFC judges, and thus would effectively be the last word on the issue.

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