We often hear capture teams claim they can eliminate a competitor through the presence of an organizational conflict of interest (OCI). However, banking on these claims to enable a win is rarely ever fruitful.  Read on through two examples of an OCI claim that worked and another typical example of a failure as we continue our Deadly Sins series! 

Sin #16: Relying on OCIs to eliminate the competition

OCIs are very difficult to prove. We feature two examples showing this as true. Read on below!

U.S. Department of Homeland Security, U.S. Customs and Border Protection (CBP)

Protest Decision Date: January 19, 2018

This competition involved a consolidation of five predecessor contracts into a single award to provide comprehensive data center support services (DCSS) for all divisions and offices of the CBP in Washington, D.C., and at its regional locations and data centers. The vendor is also helping develop a hybrid cloud environment to accommodate the closure of CBP’s Newington facility.   

IBM and Accenture each held a portion of the incumbent work, with IBM holding about 70% of the DCSS scope via its legacy contract. Although IBM’s proposal received a high confidence rating under the mission suitability factor, they were rated lower in confidence level overall, and their price was 55 percent lower than Accenture. Ultimately, the technical evaluation team (TET) found significant risks to the Government in various areas of staffing and that IBM provided insufficient details in their approach to justify the lower number of hours and labor mix to perform the PWS.

The evaluation scores between the two quasi-incumbents are noted in Table 1 below. 

Table 1 – IBM argues that Accenture’s stronger approach and higher scores were unfairly informed by Deloitte’s advisory work at CBP.

IBM challenged multiple aspects of the evaluation, including the very common OCI allegations. IBM complained that work performed by Deloitte for CBP (one of Accenture’s proposed subcontractors) creates unequal access to information and biased ground rules OCIs and asserted CBP failed to investigate and avoid or adequately mitigate those OCIs.

Deloitte was performing work for CBP for IT Support Services and support of CBP’s investment management and Office of Information Technology (OIT) budget planning services. IBM claimed Deloitte’s advisory work on these task orders provided Deloitte with “access to information” that gave Accenture’s team “unique insight” into DCSS requirements, and that Deloitte “could have” influenced the DCSS requirements.

As a subcontractor, Deloitte would financially benefit from Accenture winning the DCSS contract, which would give them motivation to influence DCSS requirements. However, contracting officers are required to avoid, neutralize or mitigate potential significant OCIs to prevent an unfair competitive advantage or the existence of conflicting roles that might impair a contractor’s objectivity. Following the publication of RFIs, the contracting officer responded to questions regarding OCIs that were raised by Deloitte, who was later required to submit a comprehensive OCI mitigation plan.

After reviewing IBM’s specific OCI allegations, the contracting officer conducted an investigation and concluded the following:

“[T]he contracting officer contacted agency personnel responsible for drafting the solicitation to determine whether Deloitte personnel had advised or been involved in that process in any way and concluded they had not. Specifically, the contracting officer determined that the RFP had been prepared ‘by a small team of CBP Government employees, none of whom are connected in any way to Deloitte or [Accenture]’. The contracting officer’s OCI investigation also considered whether Deloitte had indirectly influenced preparation of the RFP and concluded it had not.”

The contracting officer also addressed the unequal access to information OCI:

“[T]he contracting officer again engaged in interviews with agency personnel who administer and work with Deloitte and reviewed the tasks that Deloitte has performed to confirm her understanding regarding the type of information to which Deloitte has had access. . .[T]he contracting officer also considered firewalls and nondisclosure agreements that have been established. . .[T]he contracting officer concluded that there was not an unequal access to information OCI.”

The contracting officer thoroughly detailed the potential for OCIs. With this, the burden of proof is now on IBM to present hard facts indicating the existence of a conflict. The GAO sided with CBP and concluded:

“IBM’s protest allegations essentially constitute nothing more than IBM’s speculation and disagreement with the agency’s judgments and determinations; that is, IBM has failed to provide any hard evidence to demonstrate the agency’s judgments were reasonable.”

This example of an OCI allegation is a very common example that the protester faces a heavy burden to establish that an awardee received an unfair competitive advantage. Unraveling these decisions is very difficult, as the U.S. Government (typically the contracting officer) determines OCI and that can be very subjective.

However, below we have an example in which the GAO agreed with the protester that an OCI actually existed. 

National Aeronautics and Space Administration (NASA), Marshall Space Flight Center (MSFC)

Protest date: September 25, 2020

The Marshall Operations Services, Systems and Integration (MOSSI) contract replaced and consolidated two predecessor contracts, the Huntsville operations support center contract (HOSC) and the mission operations and integration contract (MO&I). Teledyne Brown Engineering, the protestor, was the incumbent contractor for the MO&I contract, while COLSA Corporation was the incumbent contractor for the HOSC contract. COLSA was a subcontractor to the awardee, SGT (later acquired by KBR).

Teledyne argued that one current NASA employee and one former NASA employee have conflicts of interest that tainted the acquisition. The current employee, Mr. X, had an ongoing personal relationship with an individual who held a high-level position with COLSA, and another individual who was an employee of KBR Wyle (SGT and KBR Wyle merged during the acquisition). All three individuals participated in a weekly foosball game, which was characterized as a weekly social gathering with a group of friends.

Mr. X was appointed to lead the procurement development team (PDT) and was involved in the development of nearly every aspect of the MOSSI acquisition, in addition to his appointment to the source evaluation board (SEB), where he participated extensively in the evaluation of proposals, was a voting member of the SEB responsible for assigning scores to the proposals and participated in briefing the SSA on the results of the agency’s evaluation.

Prior to the award, Mr. X raised the matter of his weekly meetings, which included the attendance of a COLSA employee, with NASA officials. NASA took no action to investigate or address the possible conflict:

“NASA concluded that. . .there were no absolute statutory or regulatory requirements mandating Mr. X’s removal from the SEB; because Mr. X refused to refrain from attending the weekly social gatherings; and because Mr. X already had participated so extensively in the agency’s acquisition activities to date and was viewed as vital to the success of the procurement, the agency would allow Mr. X to continue participating as a member of the SEB.”

The FAR states that the existence of an actual or apparent conflict of interest is sufficient to taint a procurement. The GAO raised several concerns:

• Mr. X was advised to be removed from the SEB or refrain from attending the weekly social gatherings by the NASA ethics attorney; however, Mr. X was neither removed nor refrained from attending these gatherings.
• None of NASA’s ethics review activities considered his role as the PDT lead.
• NASA failed to investigate any concerns from Mr. X’s relationship with the KBR Wyle (SGT) employee. Possible mitigations only considered Mr. X’s relationship with the COLSA employee.
• NASA’s mitigation measures provided no guard against Mr. X’s extensive activities in shaping the acquisition, influencing the evaluation of proposals, or voting on the scoring of the SGT proposal.

Given these hard facts, the GAO concluded:

Mr. X’s actions created a concern that the integrity of the acquisition process as a whole has or may have been compromised. It is precisely for this reason that our decisions uniformly apply a presumption of prejudice.”

Because the conflict was not adequately addressed, the contract was terminated for convenience and called for a new acquisition.   The final award was made to Teledyne Brown Engineering during the new competition which made this sustained OCI claim well worth the investment of time, effort and money (for attorneys). 

What is the lesson learned?

Trying to identify the presence of potential OCIs and relying on them to eliminate your competition is not likely to succeed. Very rarely do OCI protests yield success and require specific hard facts to do so.

In the case of IBM vs. Accenture, IBM failed to provide any hard evidence demonstrating Accenture’s unequal access to information and influence over DCSS requirements through Deloitte’s existing CBP contracts. Rather, these claims were simply speculation. On the other hand, Teledyne Brown presented specific evidence of ongoing personal relationships between a current NASA employee and COLSA and SGT, resulting in a sustained protest.

Does this topic interest you?  Are you interested in finding out more about trends in contract award decisions and even more on what has unraveled award decisions?  Check out our analysis on trends in evaluations.  Contact us today! 

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