GAO Sustains Protest, Finds Agency Essentially Condoned the Platonic Form of a Conflict of Interest; Serco, Inc., GAO B-419617.2, B-419617.3

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Protest alleging that awardee had a disqualifying conflict of interest is sustained. The awardee had hired two former agency officials who had worked as program managers on the protester’s incumbent contract. As program managers, these individuals had access to the protester’s proprietary information. The former agency employees assisted with the preparation of the awardee’s proposal. GAO found that awardee had obtained an unfair competitive advantage from these individuals.

Background

Serco Inc. was the incumbent on a contract providing professional support services to four Navy program offices. The Navy issued a solicitation for the successor contract in 2018. 

Booz Allen Hamilton (BAH) wanted the successor contract. As part of its capture efforts, BAH’s team members hired two individuals who had worked as program managers for the Navy on the Serco contract. As program managers, they had access to Serco’s proprietary information, including labor rates and staffing information. Both individuals assisted BAH in preparing its proposal for the successor contract. What’s more, BAH officials met with the contracting officer’s representative for the Serco contract and obtained information about the government’s estimate.

After receiving proposals form Serco and BAH, the Navy awarded the successor contract to BAH. Serco portested, allegingt BAH had obtained non-public, competitively-useful information from the former agency employees and, as a result, had a disqualifying conflict of interest.

In response to the protest, the Navy investigated and found no evidence that the former employees had provided BAH with competitively-useful information. The Navy found that the individuals did not recall information about Serco’s prior performance. To the extent they could recall, the Navy concluded that any information they had about labor rates would not be useful.

Legal Analysis

Where an offeror hires a former government official who had recent access to competitively useful information, and uses that official to help prepare a proposal, the proposal may be properly disqualified based on the appearance of an unfair competitive advantage. 

Here, BAH hired former Navy employees who had virtually unlimited access to Serco’s costs, staffing, technical approach, and past performance. It could not be meaningfully disputed that BAH’s team members hired the Navy employees to assist with the proposal. Moreover, there was no dispute that the individuals did, in fact, help draft BAH’s proposal. GAO rejected the Navy’s determination that BAH had not obtained a competitive advantage.

Serco is represented by Daniel R. Forman, James G. Peyster, Zachary H. Schroeder, and William B. O’Reilly of Crowell & Moring LLP. The intervenor, BAH, is represented by Kristen E. Ittig, Mark D. Colley, Thomas Petit, and Aime Joo of Arnold & Porter Kaye Scholer, LLP. The agency is represented by Candace M. Shields and Ryan M. Banach of the Navy. GAO attorneys Gleen G. Wolcott and Christinia Sklarew participated in the preparation of the decision.

GAO - Serco Inc