One of the awardee’s employees was married to the contracting officer’s representative (COR) on the incumbent contract. The agency investigated and determined this relationship was not a conflict of interest. The protester argued the agency’s investigation had only focused on the actual conflict. The protester contended the agency had not properly addressed the apparent conflict created by the relationship. The court denied the protest, reasoning that the protester had not explained how the investigation of an apparent conflict would differ from the investigation of an actual conflict.
KOAM Engineering Systems, Inc. v. United States, COFC No. 22-816C
Background
The Navy issued an RFP seeking engineering support services. The incumbent, KOAM Engineering Services, and another offeror, McKean Defense Group submitted proposals. The Navy awarded the contract to McKean.
KOAM filed a GAO protest. KOAM argued the Navy failed to address an apparent conflict of interest. Specifically, one of McKean’s management staff was married to the COR on KOAM’s incumbent contract. In response to the protest, the Navy took corrective action to investigate the conflict.
The Navy found no conflict. The COR was married to a McKean employee. But the COR had not been involved in procurement of the follow-on contract. The COR had not shared any competitively useful information with her husband. The Navy reaffirmed the award to McKean.
KOAM filed a second GAO protest, alleging the Navy had not properly considered the conflict. GAO denied the protest. KOAM filed a protest with the Court of Federal Claims.
Analysis
Actual v. Apparent Conflict
FAR 3.101 states that agencies should “avoid strictly . . . even the appearance of a conflict of interest.” KOAM argued the Navy had not satisfied this obligation. Instead, the Navy had only considered whether an actual conflict had been proven, ignoring the “appearance” language in FAR 3.101-1.
The court didn’t seen an error. KOAM had not explained how a separate appearance analysis would differ from the investigation of an actual conflict. Indeed, if a protester alleges an apparent conflict, the natural response is to investigate whether an actual conflict exists. The court declined to create a rule that separates the conflict investigation into to two investigations: one for an actual conflict and one for an apparent conflict.
The court noted there’s no per se rule that makes marriage an apparent conflict. Indeed, in this case, the couple had taken to steps to avoid the appearance of a conflict. They had separate offices. Access to the COR’s computer was restricted. The COR didn’t discuss the specifics of her work with her husband.
Impact on Procurement
The court further reasoned even if there was a conflict, a protester needed to demonstrate the conflict tainted the procurement. Here, KOAM had not also not presented any hard evidence that the COR or her spouse were involved in the procurement. In particular, while the COR administered the incumbent contract she had not meaningfully participated at all in the follow-on contract.
Cost Realism
KOAM also argued the Navy unreasonably failed to adjust McKean’s technical rating based on the risk posed by the awardee’s unrealistic staffing. The court noted the RFP provided that an unrealistic cost may result in a rescoring of technical proposals. The RFP, however, did not require a rescoring of proposals. The court found the contracting officer had properly exercised the discretion granted by the RFP. KOAM’s argument amounted to disagreement with the agency’s evaluation conclusions.
KOAM is represented by Richard Rector, Tom Daley, and Leslie Edelstein of DLA Piper, LLP. The intervenor, McKean, is represented by Rebecca Pearson, J. Scott Hommer, III, Lindsay M. Reed, and Allison M. Siegel of Venable, LLP. The government is represented by Kara M. Westercamp, William Grimaldi, and Brian M. Boynton of the Department of Justice as well as Tracey Ferguson of the Navy.
–Case summary by Craig LaChance, Senior Editor
