GAO: No OCI When Proprietary Information Obtained is of “No Relevance or Competitive Usefulness”
By Oles Morrison on October 15, 2015 | Posted in Bid Protests
A recent Government Accountability Office (GAO) bid protest decision provides yet another example of the importance for contractors to identify potential organizational conflicts of interest (OCI) when submitting a proposal in response to a federal government solicitation.
In DV United, LLC, B-411620, B-411620.2, Sept. 16, 2015, GAO denied a bid protest challenging the award of a contract to NES Associates, LLC (NES) by the Department of the Interior (on behalf of the Department of the Army). Among other arguments, DV United (DVU) alleged that NES had access to a DVU team member’s proprietary information through it performance of an unrelated Army contract, thus creating an unequal access to information type OCI.
As a refresher, FAR Part 9.5 governs the “responsibilities, general rules, and procedures for identifying, evaluating, and resolving organization conflicts of interest.” Accordingly, contracting officers are obligated to avoid, neutralize, or mitigate potential significant OCIs to prevent situations in which a contractor’s objectivity may be impaired, or a contractor may gain an unfair competitive advantage.
Relevant GAO decisions have generally recognized three separate types of OCIs that may arise under FAR Part 9.5:
- Unequal Access to Information: This type of OCI arises when a company has access to non-public information in the course of performing a contract that might provide it with an unfair competitive advantage in competing for a future contract.
- Biased Ground Rules: This type of OCI arises when a company is involved in preparing specifications, or statements of work, for a future contract, or otherwise participates in shaping the “ground rules” that will apply to a future federal procurement.
- Impaired Objectivity: This type of OCI arises when a company performing work under a contract has other business interests that might bias its judgment in performing tasks that require objectivity. This generally occurs where the contractor is providing program management support or technical assistance and advisory services, and the advice involves the contractor’s own products and services or those of a competitor, such that the contractor’s judgment may be affected because of its business interests or those of an affiliate.
Although the protest record indicated that NES in fact had access to certain proprietary information of DVU’s team member through its performance of a separate Army contract, such as standard operating procedures and organizational charts, GAO nevertheless denied the protest. In reaching its decision, GAO reviewed the sufficiency of the agency’s investigation into the alleged OCI. The agency concluded that the information received by NES was “of no relevance or competitive usefulness to NES in responding to the . . . RFQ.” GAO concluded:
In sum, based on the circumstances here and given the considerable discretion afford to contracting officers’ OCI investigations, we have no basis to conclude that the agency’s determination that NES did not have unequal access to non-public competitively useful information was unreasonable.
This decision is noteworthy for several reasons. First, this decision highlights the fine line between conduct that constitutes an OCI, and conduct that does not. Second, it also illustrates the need for contractors to continue diligently vetting their teammates and/or subcontractors for potential OCIs, as this remains an issue often protested. Third, this decision is the latest example of GAO affording contracting agency’s broad discretion with regard to their investigation of alleged OCIs.