GAO: Exclusion Improper Because Former Official Didn’t Have Competitive Information

Hiring former government officials can sometimes be tricky business for contractors. As we discussed in a previous post, this is particularly true if the former official, based on work at an agency, could give the contractor a leg up in a specific procurement.

But hiring a former government official isn’t always a problem. And as a recent GAO decision illustrates, as long as the former official doesn’t have competitively useful, non-public information, an agency shouldn’t exclude an offeror from competition merely because it employs a former government official.

In Obsidian Solutions Group, LLC, B-417134 et al. (Comp. Gen. Mar. 1, 2019), GAO considered a procurement seeking to obtain services for multiple Marine Corps programs. The solicitation noted the Corps’ intent to award each qualifying offeror with an IDIQ MATOC.

Attached to the solicitation was the Exercise Standing Operating Procedures (SOP) for the Marine-Air Ground Task Force Staff Training Program (MSTP), a 220 page document describing how the MSTP develops and conducts MSTP-led exercises. Offerors had to show an acceptable technical approach, part of which included an oral presentation addressing a scenario involving the MSTP.

Obsidian’s proposal included a subcontractor named WBB, whose briefing team for the oral presentations included a former MSTP official. This MSTP official, before he left government service, obtained an ethics letter opining that, after his retirement from the Marine Corps, he could represent Obsidian and WBB.

After receiving the names of the presenters, the CO advised that, in her view, the former official’s appearance at the oral presentation would constitute an appearance of impropriety. She noted four principal reasons: 1) the former official’s participation would suggest a special relationship between Obsidian and the government; 2) the former official had been involved in creating the latest version of the MSTP SOP and the evaluators might afford greater weight to the former official’s interpretation of the requirement; 3) the former official’s involvement with the MSTP SOP was relatively recent in terms of the procurement cycle; and 4) the former official was the former supervisor of one of the members of the technical evaluation team.

On the day of Obsidian’s oral presentation, the CO advised that if the former official appeared, “the Government will be in a position to exclude Obsidian Solutions Group from the competition in accordance with the terms of the solicitation.” Nonetheless, the former official participated in Obsidian’s presentation as planned.

Shortly thereafter, the CO excluded Obsidian from the competition noting, among other things, that the former official apparently had information regarding MSTP that give him a better understanding of government’s needs and requirements and had other non-public information. Ultimately, she concluded that the former official’s participation “gave rise to an insurmountable perception that the Government contemplated making an award to Obsidian because of [the former official’s] involvement.”

GAO did not agree with the agency’s decision to exclude Obsidian for several reasons.

First, GAO noted that a person’s familiarity with the work required by a solicitation is not, by itself, evidence of an unfair competitive advantage. There must be “hard facts” showing that the person had access to non-public information that could provide an unfair advantage.

Second, GAO pointed out that the offerors were not competing for a single award; each qualified offeror would receive an IDIQ contract. So finding that Obsidian’s proposal was acceptable did not diminish the potential for the Corps to find other offerors’ proposals acceptable.

Third, GAO found “that the record fails to establish that the protester had access to competitively useful non-public information that would justify excluding the company from the competition.” GAO reached this conclusion even though the former official supposedly had knowledge about the recent MSTP revision, MSTP’s budget, and the incumbent contractor’s performance.

Ultimately, this case offers reassurance. Federal contractors can hire former government officials (there are oftentimes very good business reasons to do so) to advise on specific procurements as long as they don’t have useful, non-public information that would give the contractor a competitive advantage. And importantly, not all information that a former official might have in her head constitutes competitively useful information that might create a conflict of interest.