The RFP required offerors to include in their proposal resumes and letters of commitment from key persons that "reflect mutually agreed position, salary, and benefits" and their agreement to work on the contract for at least 90 days. Although Patriot Contract Services (PCS), the incumbent contractor, provided the required information, the Navy Source Selection Authority awarded the contract to American Overseas Marine Corporation (AMSEA), a contractor with a lower price.
PCS filed a protest at the GAO, then withdrew the protest and filed an action at the U.S. District Court. PCS alleged in their protest that AMSEA misrepresented the availability of certain Key Personnel. PCS noted that AMSEA placed advertisements for Port Engineers in the local print media immediately after award. Therefore, AMSEA did not have the Key Personnel it proposed.
PCS gave GAO a record of statements the President of AMSEA had made to the Court. The GAO held a conference call with Counsel and the proposed Port Engineers. Five (5) of the six (6) proposed engineers denied agreeing to work on the LMSR contract. Furthermore, the engineers claimed that, prior to the award of the contract, AMSEA never discussed employment, salary, benefits, or positions with them.
When GAO questioned the President of AMSEA about the discrepancy, he claimed the Navy changed the location of the layberths of the LMSR. However, when PCS pointed out that the Navy did not change the locations and that this assertion was not correct, AMSEA acknowledged a mistake but insisted the letters of commitment were accurate. GAO deemed AMSEA's assertion an inaccurate representation.
The GAO's decision was that AMSEA made a material misrepresentation of fact in their proposal and, therefore, the PCS protest was sustained as meritorious. GAO further stated that because the Navy relied on this material misrepresentation by AMSEA, there is a substantial chance that the Navy awarded the contract to AMSEA based on the "very good" evaluation of this misrepresentation rather than awarding the contract to PCS, in part, on what should have been a negative evaluation of the Key Personnel proposed by AMSEA.
In accord with other decisions, the GAO held that "a proposal containing material misrepresentation of fact should disqualify the proposal from consideration for award, noting that the integrity of the procurement process demands no less."
