It sounds more like a scene from “All the President’s Men” than the factual background of a GAO bid protest. In McTech Corporation, B-406100, B-406100.2 (Feb. 8, 2012), an anonymous caller tipped off a procuring agency that McTech had an apparent organizational conflict of interest, leading to McTech’s exclusion from the competition. The resulting GAO bid protest didn’t bring down a presidential administration, but it does provide a cautionary tale on the intersection of SBA mentor-protégé agreements and OCIs.
McTech was an SBA-approved mentor to BrooAlexa, LLC under the 8(a) mentor-protégé program. Operating under their SBA mentor-protégé agreement, the parties had formed six joint ventures. The same individual was named as the primary contact for five of them. In addition, under the agreement, as is the case in all SBA mentor-protégé agreements, McTech agreed to provide various types of assistance to its protégé.
BrooAlexa was also a party to another joint venture, BrooAlexa Design Joint Venture LLC, in which McTech was not involved. BrooAlexa Design was the designer of record for a Department of Homeland Security training center. The agency subsequently issued a solicitation for the construction work at the same training center. McTech attended a site visit, making its interest in participating apparent.
That’s when things got a little Hollywood. First, an anonymous caller telephoned the contracting specialist, saying that McTech was closely linked to BrooAlexa, and had an OCI. The contracting specialist reported the conversation to the contracting officer.
The anonymous source didn’t stop there. He or she forwarded a packet of materials to the agency. The packet included the corporate organization of BrooAlexa, LLC and its joint ventures, the Articles of Organization for BrooAlexa Design, and other information showing the relationship between the companies. After receiving the information, the contracting officer performed additional internet research about the relationship between the companies (in contrast, without the benefit of Google, Woodward and Bernstein, had to rely on more traditional investigative techniques, like parking-garage meetings with confidential source Mark Felt, a/k/a “Deep Throat”).
After trying to explain its relationship with BrooAlexa, McTech submitted an offer on the procurement. No luck. The agency quickly informed McTech that it had been eliminated from the competition due to an OCI, namely, its “ongoing partnership” with the designer of record for the project.
McTech filed a bid protest, but to no avail. The GAO upheld the agency’s decision to exclude McTech from the competition, stating, “we find reasonable the CO’s determination that McTech’s close relationship to the designer of the construction project here created the appearance of an unfair advantage that could compromise the integrity of the procurement process.”
Mystery and intrigue aside, the McTech Corporation GAO bid protest makes an important point about the SBA mentor-protégé program: the assistance provided by the mentor is typically shielded from use in an affiliation analysis, but a mentor-protégé agreement does not exempt the parties from the OCI rules. In fact, in this case, the close relationship between McTech and BrooAlexa LLC, as established in the mentor-protégé agreement, was the basis of the agency’s finding that McTech had an impermissible OCI.