Protest challenging the protester’s disqualification from award due to a significant OCI is denied, where the incumbent’s program managers participated in the development of a proposal for a follow-on contract, while also having access to a competitor’s confidential business information. The court found that the protester was aware of the agency’s concerns about the potential conflict and of its obligations under its contract to request a firewall and otherwise mitigate the OCI.
A Squared Joint Venture and the government filed cross-motions for judgment on the administrative record regarding A2JV’s protest challenging the National Aeronautics and Space Administration’s decision to disqualify it from competing for an acquisition and business support services contract.
Late in the proposal process, the NASA contracting officer learned that two program managers for Al-Razaq Computing Services, the incumbent on the requirement and a member of A2JV, had participated in preparing A2JV’s proposal for the follow-on. After confirming that Al- Razaq had confidential business information involving an A2JV competitor in the contract files, the CO determined that A2JV had a significant potential OCI which could not be mitigated so late in the proposal process and thus she disqualified A2JV from consideration for award.
In its motion, A2JV argued that its disqualification was arbitrary and in violation of the FAR. Specifically, A2JV argued the CO failed to identify and notify Al-Razaq earlier that involving its program managers in preparing A2JV’s proposal for the contract could give rise to significant potential OCI. A2JV argued that the COs should have informed Al-Razaq that OCI could arise and then the COs should have taken steps to avoid, neutralize, and mitigate any significant potential OCI created by Al-Razaq employees participating in preparing the ABSS2 contract bid proposal.
A2JV also challenged the conclusion that there was a significant OCI. A2JV argued that merely because Al Razaq’s past and present program managers worked for Al Razaq and may have had access to information, did not mean that the program managers in fact used their positions to gain access to information that could give rise to significant potential OCI. A2JV argued that the CO’s conclusion that A2JV’s proposal was prepared by individuals with unequal access to information because Al Razaq could access contract files with information about an A2JV potential competitor on the ABSS2 contract was not supported by “hard facts.”
In response, the government argued the CO was not aware of the involvement of the two program managers in developing A2JV’s proposal until these two individuals hand-delivered the proposal to NASA, and one stated that he had worked on the proposal. The government noted that as program managers for Al-Razaq, the individuals had access to confidential business information belonging to a competitor. According to the government, this access to a competitor’s confidential business information qualifies as having unequal access to information, and meets the requirement of a “hard fact” to support a finding of a potential OCI.
Further, Al Razaq employees had various conversations with the NASA COs regarding Al Razaq’s role with A2JV in preparing a proposal for the ABSS2 contract. Al Razaq’s program manager informed the CO that the company intended to form a joint venture to compete for the contract. During a later discussion, the CO and the program manager jointly concluded that it would be best not to involve Al-Razaq’s team leads in preparing the A2JV proposal. The CO also provided information about triggering a firewall to avoid an OCI and informed Al Razaq that it would have to make a formal written request. However, NASA never received any written request.
Further, Al-Razaq had a contractual requirement in the incumbent contract to screen future work for OCI and disclose any identified or potential OCI to NASA. By failing to do so in a timely fashion, NASA was not able to design an approach that would have allowed Al-Razaq to help A2JV prepare its proposal.
Prior to the award decision, A2JV protested its disqualification with GAO, which dismissed the challenge as untimely, as the vendor was aware of the potential OCI and the agency’s position on its eligibility prior to the closing time for receipt of proposals. Separately, GAO also concluded the challenge lacked merit, given the facts.
COFC likewise concluded the disqualification was reasonable. COFC found that NASA’s CO was not obligated to take earlier action to mitigate the OCI. While A2JV argued the agency had sufficient information to act, the court noted that Al-Razaq and the CO later agreed that Al-Razaq team leaders would not participate in preparing the A2JV proposal, and that the CO informed the vendor that it would need to create a firewall and seek permission from NASA before using its employees to help with A2JV’s proposal. The court agreed that the CO had no reason to believe that Al-Razaq program managers would be working on the A2JV proposal and that she was not aware of a potential OCI until the proposal was submitted.
The court also agreed that the government had “hard facts” showing a significant potential OCI. The fact that Al-Razaq’s files had confidential business information regarding an A2JV competitor and the fact that Al Razaq failed to take action to prevent its managers from having access that information amounted to more than suspicion or innuendo.
The court also found that A2JV’s arguments challenging the decision to disqualify A2JV rather than take less drastic action are also without merit. The court noted that Al-Razaq had an OCI plan which required it to inform NASA of any potential OCI as early as possible if AlRazaq perceived it may have potential OCI, and therefore this problem was of its own making. By failing to inform the CO that the program manager was working on A2JV’s proposal, the protester provided the CO with very little flexibility to address the OCI. While A2JV argued that the program managers had not accessed confidential business information, it did not explain how A2JV had itself mitigated potential OCI concerns by walling off AlRazaq’s employees to avoid unequal access to information claims.
Finally, A2JV argued that the CO’s decision violated FAR § 9.504(e), which provides that a contracting officer must notify a contractor about a potential OCI and provide an opportunity to respond, prior to withholding award. However, the court explained that this language applies only when the apparent successful offeror is disqualified from award due to an OCI. A2JV was disqualified prior to the evaluation of proposals, and therefore was never identified as the apparent awardee.
A Squared Joint Venture is represented by Joseph P. Dirk. The government is represented by Borislav Kushnir, Commercial Litigation Branch, Civil Division, Department of Justice, with whom were Chad Readler, Acting Assistant Attorney General, Robert E. Kirshman, Jr., Director, and Douglas K. Mickle, Assistant Director, and of counsel Jerry L. Seemann, National Aeronautics & Space Administration, Office of Chief Counsel.
