Frivolous bid protests come with risks.

• Author: Moorhouse, Richard L.
• Position: Ethics Corner

* The great jurist Oliver Wendell Holmes Jr. once wrote that those who contract with the federal government should expect to have to "turn square corners" in their dealings.

Many procurement laws and regulations that govern government contracts, such as the Procurement Integrity Act, the False Claims Acts, and the recently enacted mandatory disclosure rules, ultimately focus upon contractor ethics and integrity. Before an award can be made, the contracting agency must determine that contractor's "responsibility," not just its technical and financial capabilities and capacities to perform successfully, but also whether it has a satisfactory record of business ethics and integrity.

But what of government contracting personnel? Do the same requirements for ethics and integrity apply in procurement dealings? The FAR [section] 3.101-1 sets forth the general principle that all, "Government business shall be conducted in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none."

The official conduct of government contracting personnel must withstand the "Washington Post Test"; i.e., that conduct "must, in addition, be such that they would have no reluctance to make a full public disclosure of their actions."

Government contracting personnel can never act in bad faith against a contractor with the "specific and malicious intent" of harm, or otherwise act in such a grossly negligent manner as to constitute constructive bad faith. Government contracting personnel are presumed to act in good faith, so a very high standard of proof is needed to establish that an agency's procurement actions were undertaken in bad faith.

Other principles of law, however, provide contractors the right to challenge government procurement actions that were not "above reproach," without having to prove bad faith. At the same time, contractors seeking to challenge procurement actions are expected to act with ethics and integrity and not pursue frivolous actions calculated simply to delay procurements and procurement decisions.

The Court of Federal Claims has long bound the government to an implicit contract of "fair and honest dealing" in accepting bids and proposals, ruling that breaches of this contract warrant the grant of protest relief This principle has been expanded by additional laws strengthening the court's authority to review contested procurement actions for government conduct...