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Nonprofits Can Rehash Old Contract Fight

SAN DIEGO (CN) - A long-standing dispute over what a janitorial services nonprofit employing disabled people claims is a fixed, bid-rigging scheme by a government-approved agency that hands out contracts will be resurrected in Federal Court.

U.S. District Judge Gonzalo Curiel on Jan. 5 granted plaintiff Bona Fide Conglomerate's motion to file a supplemental complaint, and also approved defendant SourceAmerica's motion to file a first amended answer and counterclaims in the years-long case.

The latest lawsuit was filed in 2014, with Bona Fide claiming SourceAmerica had breached a settlement in a previous suit. Bona Fide had claimed instead of being allocating agency for the government's AbiltyOne program - which provides procurement opportunities for services by the disabled - SourceAmerica for stiffed them on contract awards in favor of bids by some of the companies ran by members of SourceAmerica's own board of directors.

The AbilityOne program is a government procurement system where nonprofits which "substantially employ blind or severely disabled persons" can list their pre-approved goods and services for purchase by the government.

Bona Fide initially filed a post-award bid protest in Federal Court in 2010. That complaint was dismissed and later followed by a second complaint filed in 2012, which the two parties settled within a few months.

Under the settlement, SourceAmerica agreed to treat Bona Fide "objectively, fairly, and equitably, with specific attention to contract allocation."

Bona Fide claims it has not been awarded a single new contract since the settlement was signed.

The nonprofit asked the court to be allowed to introduce new facts it claims occurred after they filed the complaint in Federal Court.

Specifically, Bona Fide says it has competed for several contracts with their AbilityOne affiliate peers and has been awarded none, with contracts going to CW Resources, Professional Contract Services and Goodwill contracts.

Bona Fide claims SourceAmerica's former general counsel, Jean Robinson, said the three groups "receive contracts unfairly and automatically, regardless of merit."

Meanwhile, SourceAmerica claims Bona Fide's complaint is untimely because it is "nothing short of a 'moving target' and subject to continual expansion as plaintiff continues to apply for AbilityOne contracts and alleges unfair treatment anytime it is not awarded one."

SourceAmerica also claims Bona Fide breached the settlement itself when it failed to notify SourceAmerica of every AbilityOne bid it submitted.

Curiel granted Bona Fide's and SourceAmerica's requests "in light of the Ninth Circuit's extremely liberal policy favoring leave to amend and supplement a complaint."

The case is expected to go to trial later this year.

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