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Parent's No-Debarment Agreement Doesn't Stop CO Finding Sub Lacks Integrity

Aug.21.2008

In OSG Product Tankers, LLC v. U.S. (June 30, 2008 http://www.uscfc.uscourts.gov/sites/default/files/HODGES.OSG063008.pdf), the Court of Federal Claims held that a CO could disqualify a contractor as not "presently responsible" due to lack of integrity because the contractor's parent had pled guilty to a number of felonies, despite an agency settlement agreement with the parent ruling out the parent's debarment as long as it complied with its plea agreement. According to the court, the debarment settlement involving the parent did not estop the CO's independent non-responsibility decision regarding the subsidiary, even though the lack of integrity finding was based on the actions of the parent.

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