Bass, Berry & Sims attorney Todd Overman was quoted in the Washington Business Journal on the risks for government services companies acquiring businesses that are being spun off from larger companies. The U.S Government Accountability Office is reviewing contract awards to spinoffs that leverage the capabilities of their former parent companies in order to win contracts, exposing spun off companies to increased risk of bid protests from competitors. As Todd points out in the article, “If an offeror is pointing at things its parent has in order to meet aspects of a contract and those go away, that’s where protestors are saying, ‘Hey look, they’re not responsible, they don’t have what it is they told you they were going to have.” Todd further suggests that recent cases could fuel even more protests in 2016 as larger companies increasingly look to spinoff subsidiaries or divisions with bids that might rely on capabilities of the parent organizations.
The full article, “Buyer Beware: Government Services Spinoffs Present Protest Risk to Buyers,” was published in the Washington Business Journal on December 28, 2015 and is available online or PDF download.