The following is an installment in Crowell & Moring’s Bid Protest Sustain of the Month Series.  In this series, Crowell’s Government Contracts Practice keeps you up to date with a summary of one of the most notable bid protest sustain decisions each month.  Below, Crowell Consultant (and former GAO Bid Protest Hearing Officer) Cherie Owen discusses GAO’s decision sustaining the protest of Castro & Company, LLC, which focused upon a firm’s organizational conflicts of interest.

In Castro, the Federal Election Commission (“FEC”) sought to award a blanket purchase agreement (“BPA”) for financial management and accounting support services.  FEC made award to Contracts Management Enterprises, LLC (“CME”) and Castro protested, alleging that CME had a disqualifying organizational conflict of interest (“OCI”).  Specifically, Castro noted that CME provides acquisition support services to the same FEC office that conducted this procurement.  Indeed, CME personnel served as contract specialists providing direct support to the contracting officer who served as the source selection authority for the procurement that was the subject of the protest.  Castro argued that this work created an impaired objecitivity OCI.

In response to the protest, the agency revealed that it had not documented any contemporaneous OCI analyses.  However, the SSA claimed that she had “considered” the potential for OCIs and took steps to ensure information about the procurement was not shared with the CME personnel assisting her.  The only documentation the agency was able to muster in support of its position were emails among the evaluators showing that no procurement emails had been sent to CME personnel.  The agency also highlighted a generic notice sent to the evaluators reminding them not to discuss the procurement with anyone other than the evaluation team and the contracting officer. 

GAO found the agency’s actions deficient.  In sustaining the protest, GAO criticized the agency’s failure to conduct and document an adequate OCI investigation, noting that the entirety of the agency’s OCI analysis consisted of the “contracting officer’s bare statement that she considered whether” CME’s contract created an OCI and conclusion that CME’s contract “may” create a conflict or appearance of conflict.  For example, there was no evidence the agency took any steps to address the potential impaired objectivity OCI created as a result of CME “potentially being on both sides of the procurement process for each subsequent activity contemplated under the BPA, from task order negotiation to timing to budget availability.”  This failure was particularly glaring given that CME would ultimately be “providing both acquisition support and financial support services for the same office under two different contracts.” 

The Castro decision underscores the importance of proactively assessing the potential for OCIs.  While agency contracting officers bear the responsibility to avoid, neutralize, or mitigate OCIs, proactive analysis by the contractor could have helped avoid this outcome.  Indeed, if CME had proactively identified the potential conflict and offered a fulsome and effective mitigation plan in its proposal, the outcome of the protest may have been different.