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I have a situation with a recently awarded multiple award contract. This award was made on the basis of lowest price, technically acceptable and there were a few technically acceptable offerors that did not receive the award due to price. Three days after the awards were fully executed, one of the awardees stated that they could not do business with our agency because a few of their clients who were adverse to agency would not sign a waiver for them to work with the Agency. In the solicitation, there are disclosure requirements for the offerors regarding organizational conflict of interest and the offeror is required to certify whether it is aware or not aware of any potential organizational conflict of interest and the disclosure statement shall describe how any such conflict can be avoided, neutralized, or mitigated. The awardee did state in their proposal that they did represent clients that were adverse to the Agency, but did not believe such representation would preclude them from representation of the Authority and if given the opportunity, they would obtain waivers from these clients. I sent the contract to them to review, sign and send back to me to fully execute and gave them three days to do so, in that time, this awardee made no mention of the inability to obtain waivers from their adverse clients. So, when they signed the contract, they signed it knowing they had not obtained the waivers as they disclosed they would need to do in order to avoid, mitigate or neutralize organizational conflict of interest. So, my question is, can this contract be considered void ab initio? I have found a few GAO cases that discusses void ab initio. They are from the 70s and 80s and the scenarios aren’t necessary exactly the same, but each have stated the position that once a contract comes into existence, even if improperly awarded, it should not be canceled, that is, regarded as void ab initio, unless the illegality of the award is “plain” or “palpable.” As stated in another GAO case, Warren Brothers Roads Company v. US, the test of plainly or palpably illegal award is whether the award was made contrary to statute or regulation because of some action or statement by the contractor was on direct notice that the procedures being followed were inconsistent with statutory or regulatory requirements. If the test is not met, a contract may not be canceled, but can only be terminated for the convenience of the Government. Would the awardee knowingly signing a contract when their organizational conflict of interest not being mitigated, neutralized or avoided constitute as passing the test? Thanks in advance for your help!
