Agency: National Aeronautics and Space Administration (NASA)
Disposition: Protest Sustained
Decided: September 25, 2020
Keywords: Conflict of Interest
General Counsel P.C. Highlight:
If an Agency fails to resolve a conflict, or apparent conflict, of interest GAO will presume that the protester was prejudiced, unless the record includes clear evidence establishing the absence of prejudice.
Summary of Facts
Teledyne Brown Engineering, Inc., protests the award of a contract to SGT, LLC, by NASA under RFP No. 80MSFC19R0033. The RFP was issued to acquire ground systems and operations services at Marshall Space Flight Center (MSFC) in Huntsville, Alabama. SGT was awarded the contract and Teledyne filed this protest.
A NASA employee (referred to as Mr. X) had an ongoing personal relationship with an individual who holds a high-level position with COLSA, the incumbent contractor of a related contract. COLSA is also a major subcontractor to the awardee, SGT.
Mr. X was appointed to lead the procurement development team (PDT). After his appointment to the PDT, Mr. X effectively led the agency’s acquisition development effort from that time on. Mr. X led the PDT in the events to develop the solicitation’s initial public work statements, cost estimates, risk assessments, proposed evaluation approach, and the agency’s procurement schedule. Mr. X was later appointed to the source evaluation board (SEB). Mr. X also continued to lead the PDT throughout NASA’s acquisition cycle in the development of the draft and final RFPs and the source selection plan. The record also shows that throughout the period of time that Mr. X was engaged in these acquisition-related activities, he participated in weekly social gatherings with a group of friends, including a senior-level employee who works for COLSA, as well as another individual who is an employee of KBR Wyle (SGT and KBR Wyle merged during the acquisition).
Mr. X raised the matter of these weekly meetings with NASA officials, but NASA took no action, either to investigate, or to address, the possible conflict arising out of these circumstances. Mr. X again wrote to agency procurement counsel indicating that he was waiting for a written response to his request for an “impartiality determination.” NASA’s ethics counsel found that there was no strict statutory or regulatory requirement for Mr. X’s disqualification, but noted that the appearance of a conflict of interest could create a risk to the procurement. The ethics counsel recommended that he be removed from the SEB or refrain from participating in the social dinners until after the conclusion of the SEB.
Mr. X declined to refrain from attending the weekly social gatherings, and NASA allowed his continued participation as a voting member of the SEB. The agency’s SEB mitigation plan noted that Mr. X’s continued involvement with the SEB was vital to the successful completion of the procurement. The SEB mitigation plan outlines certain restrictions that were deemed adequate mitigation measures by NASA, including: a requirement that Mr. X would not discuss or disclose SEB activities outside of the SEB-controlled access area; and that Mr. X would not evaluate any proposal involving COLSA. However, Mr. X would continue to participate in the overall scoring of all proposals, including any proposal involving COLSA.
Basis of Protest
Teledyne argued that a NASA employee had conflicts of interest in connection with their activities surrounding the acquisition, which taint the acquisition. NASA responds that, while it was aware of Mr. X’s relationship, it took measures to mitigate the effect of the relationship that eliminated the possibility of prejudice either in favor of SGT or against the other offerors.
The Federal Acquisition Regulation sets forth clear guidelines concerning the conduct of government personnel that engage in contracting activities. GAO noted that the most fundamental guidance provides that: “Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct. The general rule is to avoid strictly any conflict of interest or even the appearance of a conflict of interest in Government-contractor relationships.”
GAO explained that it previously determined that “where an agency knowingly fails to investigate and resolve a question concerning whether an agency employee who actively and extensively engaged in procurement-related activities should have been recused from those activities, the existence of an actual or apparent conflict of interest is sufficient to taint the procurement.”
GAO discussed that the record shows that Mr. X was extensively involved in virtually every aspect of the agency’s acquisition process; that he maintained an ongoing personal relationship with both a high-level employee at COLSA, as well as another KBR Wyle employee; and that NASA, despite being made aware of the existence of these relationships, elected to allow Mr. X’s continued involvement in the acquisition, “notwithstanding what amounts to at least the appearance of a conflict of interest on the part of Mr. X.” GAO also found that none of the agency’s ethics review activities considered Mr. X’s extensive, ongoing participation in the acquisition activities as the lead of the PDT. GAO noted that NASA’s failure to consider Mr. X’s participation in the weekly social gatherings in light of his role as the lead of the PDT “further undermines the reasonableness of the agency’s decision to allow Mr. X also to be a member of the SEB.”
GAO noted that while NASA did adopt some mitigation measures, “it is not evident how those measures could be adequate in light of the totality of the circumstances.” GAO explained that the measures adopted provide no guard against Mr. X’s extensive activities in shaping the acquisition in general or in performing many of the detailed, sensitive tasks associated with his role as lead of the PDT. Moreover, GAO found “it is not evident how those measures would protect against the possibility of Mr. X influencing the evaluation of proposals from offerors other than SGT, nor is it evident why the agency concluded that it would be acceptable for Mr. X to vote on the scoring of the SGT proposal.”
Ultimately, GAO concluded that it didn’t need to resolve whether or not Mr. X’s participation in the acquisition resulted in actual prejudice. “The potential harm flowing from an actual or apparent conflict of interest is, by its nature, not susceptible to demonstrable proof of bias or prejudice.” GAO held that “where a conflict or apparent conflict of interest exists, and the agency did not resolve the issue, to maintain the integrity of the procurement process, we will presume that the protester was prejudiced, unless the record includes clear evidence establishing the absence of prejudice.” GAO determined no such evidence existed here.
GAO sustained the protest on this basis. GAO recommend that NASA terminate the contract awarded to SGT, cancel the RFP, begin its acquisition anew, and proceed without the involvement of individuals who have a conflict of interest.