Agency Properly Conducted Exchanges With Awardee to Resolve Potential Conflict of Interest; URS Federal Services, Inc., GAO B-417643.3, B-41643.3


Protest challenging agency’s OCI investigation and alleging improper discussions is denied. The protester alleged the awardee had an impaired objectivity OCI because one its subcontractors could be in position to evaluate its own work under another contract. But GAO found that the solicitation did not currently require the subcontractor to evaluate its work, and even it did, the awardee could sufficiently mitigate the conflict by excluding the subcontractor. The protester also alleged the agency had conducted unequal discussions with the awardee. GAO, however, found that the agency simply conducted exchanges, not discussion, prescribed by the FAR to resolve a conflict.

The Navy awarded a software development contract to SimVentions, Inc. The incumbent contractor, URS Federal Services, protested, alleging that SimVentions had an impaired objectivity OCI. In light of the protest, the Navy took corrective action to investigate the OCI. SimVentions submitted an OCI mitigation plan. The contracting officer found that the steps described in the mitigation plan were sufficient to address the OCI. URS then protested, alleging that the Navy failed to properly evaluate the OCI.

The alleged OCI concerned one of the SimVentions subcontractors. That subcontractor was the primary support contractor on another Navy program. URS alleged that the scope of work under the current solicitation included evaluation of the work the Navy was receiving as part of the other program. Thus, URS contended, the subcontractor would be potentially be evaluating its own work. URS further alleged that SimVentions was exclusively relying on this subcontractor so the OCI would be difficult to mitigate.

GAO, however, did not see a problem with the OCI. The solicitation did not currently include a specific requirement to evaluate work from the other program. What’s more, the conflict only applied to one of SimVentions’ subcontractors. If that subcontractor was excluded, SimVentions could assign it to another team member. Indeed, contrary to URS’s assertion that SimVentions was exclusively depending on its subcontractor, the record showed that SimVentions could perform the subcontractor’s engineering support work itself. This indicated that SimVentions was able to sufficiently mitigate the conflict.

Aside from the conflict, URS also alleged that the Navy had conducted unequal discussions with SimVentions and unreasonably allowed only SimVentions to make material revisions to its technical proposal.

GAO was unpersuaded. Under FAR 9.504(e), an agency is required to conduct exchanges with an awardee that has a conflict of interest. Here, the Navy identified SimVentions as the prospective awardee and engaged in exchanges with that firm to address the potential OCI. Those exchanges were limited to the OCI. What’s more, given that SimVentions could perform the subcontractor’s work itself, it did not appear that the company had changed its technical approach as a result of the OCI.

URS is represented by Jonathan D. Shaffer, Mary Pat Buckenmeyer, and Todd M. Garland of Smith Pachter McWhorter PLC. SimVentions is represented by James Y. Boland, and Caleb E. McCallum of Venable LLP. The agency is represented by Matthew Hawkins and Candice Thomas of the Navy. GAO attorney Peter H. Tran participated in the preparation of the decision.

GAO - URS Federal Services