In Universal Protection Service, LP v. United States, et al., No. 16-126C, the United States Court of Federal Claims (“COFC”) found that Universal was not a “complete successor in interest” to ABM Security Services. The consequence for Universal was that it did not have standing to pursue a protest regarding a proposal that had been submitted by ABM.
Notably, ABM gave notice to the Government two days after it was acquired by Universal. That was during the time that corrective action was pending in response to an earlier protest. The notice said: “With regard to ABM’s September 30, 2014 offer, we hereby confirm that the offer, along with all of ABM’s assets, has been legally transferred to Universal. The offer, now owned by Universal, continues to rely on the same assets – including facilities, resources and personnel – as originally proposed by ABM.” There is no question that under the law, a complete successor in interest to an actual offeror has standing to bring a protest. So, what went wrong here?
Well, the Court found that Universal was not the “complete” successor in interest because everything that was in the offer really did not transfer to Universal. In so deciding, the Court found various statements in ABM’s proposal, highlighting the resources available from ABM’s original parent company (ABM Industries) were more than just “color.” The defendant-intervenor and the Government also were able to identify key employees – apparently named in ABM’s proposal – that had not made the jump to the new successor in interest, as well as intellectual property that was carved out from the acquisition. While Universal argued that some of the employees would be transitioning over and that licenses for the IP were commercially available, the Court did not believe that Universal could “with any certainty fulfill the promises made in the proposal[.]” And, for the Court, that meant that Universal was something less than the “complete” successor in interest.
It seems like a harsh outcome because, as the Court noted, had the court evaluated the merits of the claim earlier, standing would not have been an issue. And, the Court did not consider the merits earlier because the agency agreed to take voluntary corrective action.
To view the decision, click here.
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