A federal judge in Virginia this week refused to throw out a lawsuit filed by a Department of Energy subcontractor, Professional Project Services or Pro2Serve, claiming Leidos Integrated Technology wrongly excluded it from a team about to take over site services at Hanford in Washington state.
In the November suit filed in the U.S. District Court for the Eastern District of Virginia, Pro2Serve argued Leidos improperly backed out of a deal to include the smaller company in a team vying for the $4-billion Hanford Mission Essential Services Contract DOE awarded to the Leidos-led Hanford Mission Integration Solutions (HMIS) team in December 2019.
For its part, Leidos said in court papers that the case essentially boils down to Pro2Serve’s reaction to DOE’s decision not to issue it a sole-source subcontract. Leidos said it never assured Pro2Serve of a subcontract.
In a legal response filed just before Christmas, Leidos argued “failure to award a subcontract is not a legally cognizable injury here,” and that this is the crux of Pro2Serve’s case. “Further dooming” the complaint is that DOE “refused in writing to approve the Pro2Serve subcontract,” Leidos said.
U.S. District Judge Claude Hilton denied the Leidos motion that asserted the Pro2Serve litigation should be dismissed for failure to state a claim. “It appears to the Court that Plaintiff’s Complaint states a claim upon which recovery can be had,” Hilton said in the one-page ruling, allowing the case by Tennessee-based Pro2Serve to go forward.
HMIS, which also includes Centerra Group and Parsons Government Services, was set to take over the services contract at Hanford Sunday from Mission Support Alliance, composed of Leidos and Centerra.
In the suit, Pro2Serve cites a “teaming agreement” with Leidos to jointly pursue the Hanford services business: an agreement Leidos later “assigned” to HMIS, “which became the formal offeror for the DOE work,” Pro2Serve said in its filing. HMIS is also named as a defendant.
Pro2Serve says in the complaint it began talks with the defendants in late 2017 about forming a team to pursue the services contract. Leidos is not a small business but needed to work with one “to be eligible for DOE’s award,” according to Pro2Serve.
The plaintiff says after much back and forth it signed an agreement with Leidos in October 2018. The agreement went so far as to say Pro2Serve would be responsible for certain specific contract line items, the Tennessee company says.
In August 2020 the Government Accountability Office rejected a rival bidder’s protest of the DOE award to HMIS. The following month the defendants wrote Pro2Serve to say the agreement with Pro2Serve was being terminated after HMIS was unable to secure DOE approval for a “sole source” subcontract for Pro2Serve, according to the Pro2Serve complaint.
Pro2Serve said it subsequently learned “DOE did not deny consent for a Pro2Serve subcontract.” The plaintiff said the defendants only provided DOE with “generic subcontracting concepts” and never provided the department with information needed to evaluate Pro2Serve as a subcontractor on the job.
“Pro2Serve was essential to the Defendants’ ability to receive the DOE contract,” and the defendants in the case “promised not to compete with Pro2Serve for that work,” according to the complaint. The action alleges the defendants also pledged to negotiate in good faith with Pro2Serve for a subcontract if they won the business.
Pro2Serve claims the defendants breached their agreement with Pro2Serve and “conspired to interfere” with the Tennessee-based company’s other business opportunities.
The Leidos brief also said there was nothing in the aforementioned teaming agreement that required HMIS to submit Pro2Serve’s pricing and cost proposal. The DOE stipulated HMIS should not award any subcontract without holding an open competition, Leidos said. So, if Pro2Serve wants a subcontract it must win a procurement, Leidos said.
