Originally from ICDR Awards and Commentaries - Volume 2

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COMMENTARY - ICDR CASE NO. 321-08

I. Introduction

This Award is notable because it involves an arbitral tribunal drawing adverse inferences against a party to reach its decision. The dispute arose out of an agreement whereby Claimants agreed to provide consulting, procurement, and technical support services in connection with Respondents’ efforts to procure and perform a prime vendor contract with an agency of the U.S. Department of Defense (the “Agency”).

II. Summary of Facts

In September 2004, the Agency invited bids for prime vendor contracts calling for the provision of food and supplies to U.S. troops in Afghanistan (Zone 3).  At that time, Claimants had already been awarded a contract for the provision of food and supplies to U.S. troops in Iraq, Kuwait, and Jordan (Zone 1). Thus, Claimants were foreclosed from bidding for the Zone 3 contract because U.S. regulations prohibited contractors from being awarded more than one prime vendor contract at a time.   But Claimants were not prohibited from partnering with other eligible bidders.