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Successfully Protesting Organizational Conflicts of Interest

On Behalf of | May 24, 2018 | Government Contracts

A recent decision of the Government Accountability Office (GAO) is a good lesson for ways contractors can successfully, and unsuccessfully, deal with organizational conflicts of interest (OCI).

ARES Technical Services Corporation protested a NASA award to Millennium Engineering and Integration Company (MEI), claiming that NASA did not mitigate an OCI that MEI had as a result of the work MEI proposed for one of its subcontractors and that the agency’s eventual waiver of the OCI was improper

In its limited review of OCI waivers, all GAO looks at is whether the waiver satisfied the three requirements of FAR §9.503: that the waiver is in writing, that it describes the extent of the conflict, and that it is approved by appropriate agency authority. Since the agency’s waiver had complied with FAR, ARES did not challenge that.

Instead, ARES argued that the agency did not follow its own waiver rules. While one might assume this would be a successful protest ground, GAO does not review an agency’s compliance with internal agency guidance. An agency’s compliance with its own rules is not a requirement of FAR §9.503. Thus, GAO denied this protest ground.

ARES’s second OCI argument focused on the changes MEI made to its technical proposal to try to mitigate the OCI, and NASA’s failed to consider what impact this mitigation strategy would have on MEI’s technical approach. For example, MEI’s technical proposal gave overarching authority to MEI’s program manager, but MEI’s mitigation plan allowed the government to deal directly with subcontractors with no involvement from MEI management. And although the contracting officer told GAO that the impact of the mitigation plan on MEI’s proposal was discussed internally, there was no documentation of these discussions. GAO found that “there is nothing in the contemporaneous record to show that the agency evaluated the impact of MEI’s mitigation strategy on its technical approach.” Because there was nothing in the record supporting the contracting officer’s claim that it had the agency had considered this impact in its award decision, GAO sustained the protest.

The procurement policy of full and open competition encourages agencies to find some way to mitigate OCIs. FAR §9.504(e) shows the preference for mitigating OCIs as opposed to disqualifying an otherwise successful offeror for an OCI: “The contracting officer shall award the contract to the apparent successful offeror unless a conflict of interest is determined to exist that cannot be avoided or mitigated.” This FAR policy favoring mitigation makes effective OCI mitigation plans essential to not losing government work that a contractor is in line to win.

ARES Technical Services Corporation, B- 415081.2, B- 415081.3, May 8, 2018.  

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Terry O’Connor is a Partner at Berenzweig Leonard, LLP. Terry and Stephanie Wilson lead the firm’s Government Contracts practice. Terry can be reached at [email protected].