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GAO Recommends Cancellaton of a $38.5M Award Due to Organizational Conflict of Interest

Posted on September 13th, 2016 by

The GAO release its decision on September 12, 2016, sustaining a protest filed by AT&T over a $38.5M networking contract that the Air Force awarded to MacAulay-Brown. AT&T was the incumbent for this networking contract.  The GAO found that the Air Force failed to consider a potential Organizational Conflict of Interest by a subcontractor on the MacAulay-Brown Team. This subcontractor – whose name was redacted from the GAO decision – had been working on an Air Force contract for acquisition support. AT&T argued that the subcontractor had access to AT&T’s staffing levels as the incumbent, which was nonpublic information.

The Contracting Officer compared proposals and found that Mc MacAulay-Brown’s proposal “did not mirror incumbent [AT&T] contract staffing levels.” Because of this, the Contracting Officer concluded that MacAulay-Brown did not receive nonpublic staffing information from its subcontractor.  AT&T argued, and the GAO agreed, that “a different staffing level than the incumbent contractor does not reasonably demonstrate that the non-incumbent contractor was not given access to the incumbent contractor’s information.”

The GAO noted that FAR §§ 9.504(a) “requires that contracting officers identify and evaluate potential organizational conflicts of interest, and directs contracting officers to avoid, neutralize, or mitigate potential significant conflicts of interest so as to prevent an unfair competitive advantage or the existence of conflicting roles that might impair a contractor’s objectivity.” The GAO found that “the contracting officer does not appear to have considered the possibility that a non-incumbent contractor could have made use of the incumbent contractor’s proprietary information without necessarily “mirroring” the specific staffing levels.”

This case illustrates the need to vet members of your team for potential conflicts of interest and institute a mitigation plan to avoid disqualification. In this regard, the GAO noted that:

As our Office has held, mitigation efforts that screen or wall-off certain individuals within a company from others, in order to prevent an improper disclosure of information, may be an effective means to address an unequal access to information OCI. Enterprise Info. Sys., Inc., B-405152 et al., Sept. 2, 2011, 2011CPD ¶ 174 at 11; Aetna Gov’t Health Plans, Inc.; Foundation Health Fed Servs., Inc., supra at 13.

However, in this protest, the GAO found that the record did not document the Contracting Officer’s review of the subcontractor’s mitigation plan and conclusion that it was adequate.


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