Protest alleging that agency official had improper conflict of interest is sustained. GAO found that a conflict involving an agency official tainted the award of a contract. The official had led the development of the solicitation and was a member of agency’s evaluation team. The official also attended weekly dinner/competitive foosball gatherings where he hung out with employees of other companies that subcontracted with or were owned by the awardee. The agency’s ethics counsel had recommended that the agency official be removed from the evaluation team. But the agency had ignored this advice. GAO found that the agency official had at least an apparent conflict of interest. Under the circumstances, GAO presumed the conflict had caused prejudicial harm.
NASA awarded a contract to SGT, LLC for ground systems and operations services at Marshall Space Flight Center in Alabama. An unsuccessful offeror, Teledyne Brown Engineering, protested alleging that the procurement had been tainted by a conflict of interest.
The conflict involved a NASA employee identified in the decision as Mr. X. Mr. X was the leader of the procurement development team for the acquisition. Mr. X led the team in preparing the performance work statement, the agency’s cost estimates, risk estimates, and the evaluation approach. What’s more, Mr. X was a member of the source evaluation board that. Indeed, he was a voting member of the board responsible for assigning scores to proposals. As GAO characterized it, Mr. X “exercised an ongoing, continuous leadership role in the development of almost every aspect of the agency’s acquisition . . . and participated extensively in the evaluation of proposals.”
While Mr. X was leading the NASA acquisition, he also attended weekly social gatherings for dinner and competitive foosball. These gatherings included a high-level official from COLSA Corporation, which had been a prime contractor on a predecessor NASA contract and was also one of SGT’s major subcontractors on the solicited requirements. The gatherings also included an employee of KBR Wyle, which had merged with SGT during the acquisition.
Mr. X informed NASA’s ethics counsel about his participation in the foosball gatherings. The ethics counsel issued an opinion recommending that Mr. X either be removed from the source evaluation board or refrain from attending the gatherings. The opinion, however, made no mention of Mr. X’s involvement with the acquisition activities, including his leadership of the procurement development team.
Despite the opinion from ethics counsel, Mr. X declined to stop attending the foosball gatherings. Additionally, NASA decided to allow Mr. X to continue to serve on the source evaluation board, believed that his involvement was essential to successful completion of the procurement. NASA instituted a mitigation plan that, among other things, prohibited Mr. X from discussing evaluation outside of the source evaluation board and precluded him from evaluating any proposal involving COLSA.
GAO noted that where an agency fails to investigate and resolve a question concerning whether an agency employee who was actively engaged in procurement activities should have been recused from those activities, the existence of an actual and apparent conflict of interest is sufficient to taint the procurement. With the standard in mind, GAO reasoned that it several concerns with NASA’s handling of Mr. X.
First, GAO was concerned that NASA had apparently ignored the opinion of its own ethics counsel. The counsel had recommended that Mr. X. either be removed from the source evaluation board or not attend the social gatherings. Neither of these things happened.
Second, even if Mr. X’s continued participation on the source evaluation board was reasonable, none of the NASA’s ethics review activities or deliberations considered his extensive involving in the acquisition activities developing the solicitation. NASA’s failure to consider those acquisition activities undermined the reasonableness of the decision to allow Mr. X to continue on the source evaluation board.
Third, NASA failed to investigate Mr. X’s relationship with the KBR Wyle employee who attended the weekly gatherings. It may have been the case that Mr. X’s relationship with that person was not problematic, but NASA never looked into the issue.
Finally, while NASA had adopted some mitigation measures, GAO did not think they were adequate under the circumstances. The mitigation measures had provided no guard against Mr. X shaping the acquisition nor did they protect against the possibility of him influencing the evaluation of proposals.
NASA argued that even if Mr. X had a conflict of interest, Teledyne had not been prejudiced because the agency had adopted a mitigation strategy. But GAO opined that in circumstances such as these, the potential harm flowing from an actual or apparent conflict of interest is not susceptible proof, so GAO will simply presume prejudice.
GAO recommended that NASA terminate the contract awarded to SGT and begin the acquisition anew without the involvement of Mr. X.
Teledyne is represented by Andrew E. Shipley, Philip E. Beshara, Chandra L. Brown, and Jessica S. Aldrich of Wilmer Cutler Pickering Hale and Dorr, LLP. The intervenor, SGT, is represented by Seth H. Locke, David E. Fletcher, Alexander O. Canizares, and Brenna D. Duncam of Perkins Coie LLP. The agency is represented by Vincent A. Salgado, Rosalind Cylar, and Warnecke Miller of NASA. GAO attorneys Scott H. Riback and Tania Calhoun participated in the preparation of the decision.
