OCIs and Former Government Employees: GAO Finds Agency Properly Excluded Contractor

When it comes to hiring former government employees, criminal law prohibits certain conduct (like attempting to hire a contracting officer who is currently evaluating your proposal).  But just because a hire meets the letter of the law does not mean that it won’t cause an organizational conflict of interest, or OCI.

That’s exactly what happened in the GAO’s decision in GAO Protest of TeleCommunication Systems, Inc., B-404496.3 (Oct. 26, 2011)–and it cost a contractor an award.

The TeleCommunication Systems GAO bid protest case involved a Defense Information Systems Agency procurement for satellite communications, or SATCOM.  DISA originally awarded the contract to TeleCommunication Systems, Inc. (“TCS”).  However, a competitor filed a bid protest, alleging that DISA had ignored a serious OCI created by TCS’s hiring of the former DISA SATCOM Special Interest Program Manager.

DISA took the protest seriously.  Over a period of months, it investigated the matter, and ultimately concluded that TCS’s hiring of the former government employee created at least the appearance of an impropriety, which could not be avoided, neutralized or mitigated.  Based on this conclusion, DISA terminated TCS’s contract and excluded TCS from further participation in the procurement.  TCS protested its termination and exclusion to the GAO.

The GAO denied TCS’s protest. Reviewing the evidence put together by DISA, it noted that the former government employee, in his former position, had access to non-public information regarding the procurement, and that after joining TCS, he had participated in meetings involving the procurement.  The GAO held that the former government employee’s participation in the procurement “may have created an unfair competitive advantage, but certainly created an appearance of impropriety that is based on significant documentary evidence.”  Under the FAR, an appearance of impropriety is all that is needed for a contractor to have an OCI, meaning that DISA properly terminated TCS’s contract and excluded it from the competition.

TCS might have held onto its contract had it taken steps such as: (1) requiring the former SATCOM employee to contractually agree not to discuss the procurement with anyone else at TCS; (2) inform ingother employees that they could not discuss the procurement with the former SATCOM employee; and (3) ensuring that the former SATCOM employee had no access to files or other documentation relating to the procurement.  While there are no guarantees, in some cases, establishing an effective “firewall” by taking steps like these can avoid an OCI, but here, TCS did not effectively wall off the former SATCOM employee from the procurement.

The TeleCommunication Systems GAO bid protest decision demonstrates why government contractors need to be extremely careful when it comes to hiring former government employees.  Even if the hire is legally permissible, it may create an OCI if you do not take immediate and strong steps to eliminate even the appearance of a conflict.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *