GAO Rejects Innuendo-Based OCI Disqualification

Thinking about hiring an employee of the incumbent contractor for your next bid? If so, make sure to protect yourself from disqualification based on an organizational conflict of interest.

In a recent bid protest by Archimedes’ Global, Inc., the GAO reversed the Government’s decision to exclude Archimedes from consideration for a bid when an alleged OCI was based on mere innuendo and supposition instead of hard facts supported by the record.

Pursuant to FAR 9.505, certain businesses may be disqualified from the bid process if they have an “unequal access” OCI, which exists where an offeror obtains non-public information that may be competitively useful. In challenging an agency’s identification of a disqualifying conflict of interest, a protester must demonstrate that the agency’s determination, “did not rely on hard facts, but instead was based on mere inference or supposition of an actual conflict of interest, or is otherwise unreasonable.”

Archimedes Global, Inc., B-415886.2 (June 1, 2018) concerned a request for proposal from the Department of Homeland Security to perform management and support services. Archimedes was eliminated from consideration based upon an alleged “unequal access” OCI. The GAO sustained the protest because the Government’s decision to exclude Archimedes was not based on hard facts but instead relied on mere innuendo and supposition unsupported by the record.

The Department of Homeland Security, United States Citizenship and Immigration Services, issued a task order to perform management and support services. Archimedes submitted a bid and was found to be technically superior to all other offerors but was disqualified from award consideration because the agency found that Archimedes had an apparent OCI. With Archimedes out of the running, the agency issued the task order to another business.

The agency determined that Archimedes’ had an OCI because it proposed to hire the senior and intermediate program managers currently working for the incumbent contractor, Ambit Group, LLC. Ambit had access to procurement sensitive information, and the task order permitted the agency to disqualify Ambit for competing for any follow-on requirements. The agency found that Archimedes had an “unequal access” OCI because the proposed Ambit employees could have provided Archimedes with “unequal access to non-public, competitively useful information.”

Archimedes filed a protest with the GAO arguing the agency unreasonably eliminated it from consideration based on Archimedes’ proposed inclusion of two current Ambit employees as key employees to perform the roles of senior program manager and intermediate program manager.

The central question in this case concerns the Government’s basis for disqualifying a business from consideration based on a conflict of interest. In Archimedes case, the GAO found that the agency’s decision to disqualify Archimedes was not based on hard facts, but, rather, on innuendo and supposition concerning the activities of Ambit employees.

Chief among the GAO’s concerns was the fact that the contracting officer, without any underlying evidence, concluded that the information was provided to Archimedes because there was a “possibility that the individuals in question may have had access to competitively useful, non-public information”.

The GAO disagreed noting “the record shows that neither individual is currently employed by AGI, and there is no evidence to show that the individuals provided AGI with competitively useful, non-public information, or otherwise participated in preparing the AGI proposal.” In light of those concerns, the GAO sustained Archimedes’ protest and sent it back to the agency for reconsideration.

Companies that want include employees of the incumbent contractor in their proposal must take precautions to guard against even the appearance of an OCI.

In Archimedes’ case, it paid off big time.

Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919.

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook.