GAO Extends Reach Of OCI Protest Timeliness Rules

There have only been a handful of published decisions in which the U.S. Government Accountability Office has dismissed a protester’s post-award organizational conflict of interest (OCI) protest ground for failing to raise the challenge via a pre-award bid protest. Moreover, such decisions have all involved an allegation that a competitor was improperly permitted to participate in the competition due to the competitor’s actual or alleged OCI. Until now, that is. The GAO’s recent decision in A Squared Joint Venture, B-413139, et al. (2016) appears to be the first published decision in which the GAO found a protester’s post-award OCI allegation to be untimely where the protester failed to raise the allegation via a pre-award bid protest, and where the protester’s OCI allegation involved the protester’s — rather than a competitor’s — eligibility to participate in the competition. This article examines the GAO’s decision in the A Squared Joint Venture case.

On May 1, 2011, the National Aeronautics and Space Administration awarded to Al-Razaq Computing Services an acquisition and business support services contract (ABSS1) to be performed primarily at the George C. Marshall Space Flight Center (MSFC) in Huntsville, Alabama. The ABSS1 performance work statement required the contractor to provide acquisition and business support services and related program management in support of MSFC and ancillary facilities. The ABSS1 contract also included the following limitation-on-future-contracting clause:

On Feb. 16, 2016, NASA issued the ABSS2 solicitation. As with the ABSS1 contract, the ABSS1 performance work statement required the contractor to provide a variety of acquisition and business support services to MSFC. The ABSS2 solicitation included a limitation-on-future-contracting clause, which was “identical to that in the ABSS1 contract.” The solicitation also directed offerors to submit an OCI mitigation plan as part of their proposals.

On Feb. 24, 2016, the Al-Razaq Acquisition Team Lead requested a meeting with the contracting officer. The Al-Razaq Acquisition Team Lead “wanted to know whether Al-Razaq personnel performing the ABSS1 contract could assist in any manner with the preparation of the offeror’s proposal for ABSS2.” As part of this inquiry, the Al-Razaq Acquisition Team Lead provided the contracting officer with a copy of a letter that NASA furnished to Al-Razaq’s predecessor, Digital Fusion Solutions Inc., regarding a similar inquiry. That letter stated, in relevant part:

The purpose of this letter is to inform Digital Fusion ... that in accordance with the current contract ..., Digital Fusion ... is prohibited from proposing, either as a contractor or subcontractor, on any activity during the performance of this contract. Thus, as currently written, the contract does not allow Digital Fusion to participate in any proposal activity related to the successive contract. However, the Government is willing to modify the existing contract ... to allow Digital Fusion to participate ... in the successive contract if a firewall is used to separate both the information and personnel associated with the current contract from the proposal team associated with the successive contract.

The contracting officer then “advised the Al-Razaq Acquisition Team Lead that guidance similar to that provided to Digital Fusion would be given in response to any official request by the contractor, that is, that Al-Razaq would be required to implement a firewall and separate both the information and personnel associated with performing the current ABSS1 contract from the team of Al-Razaq employees preparing the offeror’s ABSS2 proposal.”

On or about March 18, 2016, the current and former Al-Razaq program managers for the ABSS1 contract hand-delivered to the MSFC contracting activity the Al-Razaq-led joint venture’s ABSS2 proposal. At this time, the Al-Razaq program manager informed agency officials that he had been involved in the preparation of the Al-Razaq-led joint venture’s ABSS2 proposal, and had spent 10-12 hours a day for the last two weeks working on the proposal.

On May 9, 2016, the contracting officer notified the Al-Razaq-led joint venture that its proposal was eliminated from the competition because of an “unequal access to information OCI.”[1] In support of her determination in this regard, the contracting officer stated:

On May 17, 2016, the Al-Razaq-led joint venture filed a bid protest with the GAO, challenging NASA’s decision to exclude the offeror from the competition due to OCI concerns. In its protest, the Al-Razaq-led joint venture argued, among other things, that it was “unnecessary for Al-Razaq to firewall all employees performing the ABSS1 contract from those preparing the offeror’s ABSS2 proposal, because of internal firewalls that Al-Razaq had in place while performing the ABSS1 contract.” The protester also argued that it was “unnecessary to prelude the involvement of the current and former Al-Razaq program managers from assisting with the offeror’s ABSS2 proposal because these individuals did not have the same level of access to competitively useful information while performing the ABSS1 contract.”[2] Accordingly, the protester argued that NASA “failed to conduct a reasonable OCI investigation and lacked requisite hard facts.”

In response, NASA argued that its OCI investigation and evaluation were reasonable and that the protest was untimely in any event. In particular, NASA argued that the protester knew, prior to the closing time for receipt of proposals, that: (1) NASA “believed that Al-Razaq had an unequal access to information OCI as a result of performing the ABSS1 contract”; (2) NASA “had determined that Al-Razaq’s ability to mitigate this OCI, and therefore eligibility to compete here, required the contractor to firewall all employees performing the ABSS1 contract from those preparing the offeror’s ABSS2 proposal”; and (3) that Al-Razaq “believed that such a firewall of all ABSS1 employees was in fact unnecessary.” As such, NASA argued that the protest challenged the ground rules of the competition and that, accordingly, the protest was required to be filed prior to the closing time for receipt of proposals.

The GAO began its substantive analysis by setting forth the general timeliness rules for protests challenging the ground rules of a competition, explaining that such protests generally must be filed before the closing time set for receipt of proposals. The GAO then explained:

Next, the GAO stated that, in this case, “the record reflects that prior to the closing time for receipt of proposals, [the protester] was aware of the operative facts regarding the existence of an actual or potential OCI involving itself, as well as the agency’s position on the offeror’s eligibility to compete in the ABSS2 procurement.” In particular, the GAO stated that the protester “was intimately knowledgeable of the scope of work, and terms, of the ABSS1 contract, and the requirements of its own OCI mitigation plan.” Moreover, the GAO pointed out that the contracting officer “expressly informed Al-Razaq of the agency’s position that that firm had an unequal access to information OCI resulting from its performance of the ABSS1 contract.” Further, the contracting officer “informed Al-Razaq of the agency’s position that — as it had done on a prior occasion — Al-Razaq was precluded from competing in the ABSS2 procurement unless it established a firewall between all ABSS1 employees and those individuals who would be preparing the offeror’s ABSS2 proposal.” Accordingly, the GAO concluded, the protester “was fully aware prior to closing of the fundamental ground rules by which the ABSS2 competition was being conducted.” Such being the case, the GAO dismissed the protest as untimely, stating that, if the protester “was of the opinion that a firewall of all ABSS1 employees from proposal preparation was unnecessary — notwithstanding the known agency position on the matter — it was required to protest the ground rules of the procurement prior to the [solicitation’s] closing date.”

The GAO’s recent decision in A Squared Joint Venture appears to be the first published decision in which GAO found the protester’s post-award OCI challenge to be untimely for failing to bring the challenge via a pre-award bid protest, and in which the allegations involved the protester’s challenge to the agency’s determination that the protester should be excluded from the competition due to OCI concerns. Indeed, until now, GAO decisions involving the dismissal of a protester’s post-award OCI protest for failing to bring the challenge via a pre-award bid protest have all involved allegations that a competitor was improperly permitted to participate in the competition due to the competitor’s actual or alleged OCI. While many bid protest attorneys have long assumed that the GAO’s protest timeliness rules are equally applicable to OCI issues involving both the protester and other offerors, the GAO’s decision in this case is noteworthy because it confirms that this assumption is correct. Government contractors and bid protest attorneys alike would be well advised to familiarize themselves with the GAO’s decision in A Squared Joint Venture.

[1] As the GAO explained in its decision, an “unequal access to information OCI exists where a firm has access to nonpublic information as part of its performance of a government contract, and where that information may provide the firm a competitive advantage in a later competition for a government contract.”

[2] The protester did not dispute that the current and former Al-Razaq program managers assisted with the preparation of the offeror’s ABSS2 proposal.Paste your document here

Republished with permission. This article first appeared in Law360 on September 21, 2016.