B-400216, AT&T Government Solutions, Inc., August 28, 2008
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release.
Protest of firm’s elimination from competition due to perceived organizational conflict of interest (OCI) is sustained where agency failed to evaluate protester’s proposed mitigation plan, failed to consider whether protester would actually be in a position to evaluate its own products, and did not give protester notice of and an opportunity to respond to OCI findings prior to firm’s disqualification.
AT&T Government Solutions, Inc. protests its disqualification, due to a perceived organizational conflict of interest (OCI), under request for proposals (RFP) No. N00189-08-R-0003, issued by the Department of the Navy for information operations (IO) support services, including analysis of computer network security systems. AT&T contends that the agency improperly failed to consider the OCI mitigation plan included in its proposal; unreasonably concluded that the firm would evaluate its own products, given that the agency does not subscribe to the firm’s network’s products and services; and improperly failed to give the firm notice of and an opportunity to respond to the agency’s OCI concerns before being disqualified.
The RFP, issued on January 2, 2008, sought proposals for
the award of an indefinite-delivery/indefinite-quantity contract for a 1-year
base period and 4 option periods for IO support services related to the
following 11 performance tasks: fleet
training; computer network operations; strategic, operational and tactical
planning; operational support; functional data management; IO requirements;
experimentation, tactics evaluation and doctrine development; systems
assessment; information technology management and administration; engineering
and technical services; and IO management and professional support
services. RFP at 14-17. Award is to be made to the firm that submits
the proposal deemed to represent the best value to the agency considering
technical factors and price.
The RFP advised that the contracting officer would
evaluate all proposals to determine whether a prime contractor or subcontractor
had an actual or apparent OCI in performing the RFP’s tasks.
AT&T, among other firms, submitted its proposal by the scheduled closing date. The agency reports that, without evaluating the firm’s proposal (including its OCI mitigation plan), the contracting officer conducted an OCI assessment for the firm and determined that, since one of the firm’s business operations and affiliates provides IO products and services similar to the types of products in use by the Navy and to be evaluated under the RFP, AT&T would be “in a position to favor its own products and capabilities . . . (and disfavor its competitor’s products).” OCI Assessment at 31. The contracting officer concluded that the firm had an “impaired objectivity” OCI and informed AT&T that the terms of the solicitation required its disqualification from the procurement. This protest followed.
AT&T challenges its elimination from the competition. The protester contends that, contrary to the RFP’s terms, the agency failed to consider the firm’s proposal--which included an OCI mitigation plan--and improperly failed to give the firm notice of any OCI concerns or an opportunity to respond to such concerns prior to the agency’s decision to exclude AT&T from the competition. AT&T contends that the agency unreasonably determined that the firm would be evaluating its own products under the contract without confirming whether AT&T’s products are even available to the agency, which is not a subscriber to its network services, and failed to recognize that, even if the firm would be required to evaluate its own or others’ products in providing advice and assistance services under the terms of the RFP, the RFP itself set out contracting limitations that could have resolved the perceived OCI without requiring its disqualification from the competition.
The agency responds only generally to the protester’s allegations, stating that disqualification of a firm constitutes “strict avoidance” of a possible OCI within the meaning of the FAR, and it intended the RFP to require such disqualification without consideration of the firm’s response or any potential mitigation plan. The agency’s legal support for its position is limited to general contentions that it reviewed previous decisions of our Office discussing OCIs (without detailing what aspect of the cases it relied on as support for its determination that disqualification of the protester was required here); another agency’s OCI assessment of a different firm in an unrelated protest where, unlike here, mitigation of an apparent OCI was pursued, accepted, and considered unobjectionable by our Office (without discussing the applicability, if any, of that assessment to the facts of the current case); a law review article discussing different types of OCIs (without stating which portions of the article the agency found instructive on the facts here); and the guidance provided in FAR subpart 9.5 for resolution of OCIs (without citing the specific regulatory provisions it believes support its actions). See Agency Report at 3. As discussed further below, under the circumstances here, we conclude that it was unreasonable for the agency to disqualify AT&T without allowing the firm to respond to the agency’s concerns or propose a plan to mitigate any perceived OCI.
Contracting officers are required to identify potential
conflicts of interest as early in the acquisition process as possible, and to
avoid, neutralize, or mitigate such conflicts to prevent the existence of
conflicting roles that might impair a contractor’s objectivity, such as where
contract performance entails evaluating itself or its own products, since the
firm’s ability to render impartial advice may be undermined. See FAR sections 9.505, 9.508; PURVIS
Sys., Inc., B-293807.3, B-290807.4,
First, although the RFP required the contracting officer to evaluate all proposals to determine whether an apparent OCI exists, the agency here concedes that AT&T’s proposal, which included a proposed OCI mitigation plan, was not evaluated prior to the firm’s disqualification; the OCI assessment, therefore, clearly was not conducted in accordance with the terms of the RFP, which called for such an evaluation. Second, as the protester points out, and as stated above, the solicitation here included provisions (referencing the general rules of FAR sect. 9.505) for limitations on contracting as a means of avoiding, neutralizing, or mitigating perceived OCIs, but there is no indication in the record that the agency considered their application to AT&T prior to deciding to disqualify the firm. While the agency suggests that, since the RFP did not specifically request a mitigation plan from the offerors and advised that firms with an actual or apparent OCI would be disqualified, offerors should have known that plans to avoid, neutralize, or mitigate an OCI would not be considered by the agency, our review of the solicitation does not support the agency’s position. Rather, our review shows that the RFP contemplated that the agency would attempt to avoid, neutralize, or mitigate perceived OCIs, at least to the extent of applying the “contracting restrictions” provisions of the RFP. These provisions, as stated above, allow participation in the procurement with some performance limitations or where other safeguards are in place to ensure objectivity; we therefore agree with the protester that a reasonable interpretation of the RFP is that disqualification was a determination to be made after consideration of whether or not a perceived OCI could be resolved short of eliminating the firm from the competition. See RFP at 39-41. The agency, however, failed to conduct the required review of whether or not the perceived OCI attributed to AT&T could be resolved, i.e., avoided, neutralized or mitigated, without the need to disqualify the firm.
Third, the agency provides no support for its conclusion
that AT&T would be evaluating its own IO security products in performance
of the tasks identified in the RFP, such as the required analysis of the
agency’s current IO systems. According
to AT&T, its IO security products are not part of the Navy’s IO systems to
be supported here; rather, AT&T’s IO products are only available to its
network subscribers and the Navy does not subscribe to that network. The OCI determination, therefore, appears to
be based more on unsupported inference than fact. See NES Gov’t Servs., Inc.; Urgent
Care, Inc., B-242358.4; B-242358.6,
In light of the lack of support for the agency’s OCI assessment of AT&T, and the failure to give AT&T an opportunity to respond to the agency’s perceived OCI, we recommend that the agency give the firm notice of the reasons for its OCI concerns and an opportunity to respond. The agency’s new OCI assessment for the firm should also include, consistent with the solicitation, consideration of the firm’s proposal (including its proposed OCI mitigation plan). To the extent a perceived OCI is found, the agency should then consider the applicability of the “contracting restrictions” provided in the solicitation to resolve any OCI concerns, if appropriate (i.e., prior to a disqualification determination, if any). We also recommend that AT&T be reimbursed the costs of filing and pursuing the protest, including reasonable attorneys’ fees. 4 C.F.R. sect. 21.8(d)(1) (2008). AT&T should submit its certified claim for costs, detailing the time expended and costs incurred, directly to the contracting agency within 60 days after receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).
The protest is sustained.
Gary L. Kepplinger
OCIs, as addressed in FAR subpart 9.5 and the decisions of our Office, can be
broadly categorized into three groups.
The first group consists of situations in which a firm, as part of its
performance of a government contract, has in some sense set the ground rules
for the competition for another government contract by, for example, writing
the statement of work or the specifications.
FAR sect. 9.505-2; Aetna Gov’t Health Plans, Inc.; Found. Health Fed.
Servs., Inc., B-254397.15 et al.,
 The OCI assessment itself states only that “[deleted].” OCI Assessment at 31.
 Whether or not AT&T would be evaluating its own products would affect not only the agency’s conclusion that AT&T might favor its own products, but also its determination that, in favoring its own products, the firm would be biased against other firms’ products.