Link: GAO Opinion
Agency: Central Intelligence Agency
Disposition: Protest denied.
Keywords: Corrective Action; Organizational Conflict of Interest (OCI)
General Counsel P.C. Highlight: Where a procurement decision–such as whether an OCI should be waived–is committed by statute or regulation to the discretion of agency officials, the GAO will not make an independent determination of the matter but will review whether the agency’s decision was reasonable.
MCR Federal, LLC (MCR) protests the award of a contract to Scitor Corporation (Scitor), under request for proposals (RFP), issued by the Central Intelligence Agency (CIA) for cost analysis and research support services for the Office of the Director of National Intelligence (ODNI) Cost Analysis Improvement Group (CAIG).
The statement of work (SOW) encompassed three tasks–cost analysis production support, cost research support, and independent technical assessment support. The level-of-effort was estimated at 12 to 14 full-time equivalent (FTE) personnel plus a reach-back capability for subject matter experts of 1 FTE in each contract year. All personnel were expected to have appropriate security clearances. The RFP contemplated the award–on a “best value” basis–of a cost-plus-fixed-fee, level-of-effort contract for a base period, with four options.
With regard to OCIs, the RFP advised offerors that the successful contractor would be ineligible to participate as either a prime or subcontractor on any major system acquisition by ODNI, over the life of the contract. Written proposals and oral presentations were to be evaluated under five factors (with subfactors)–technical approach; management; past; security; and cost. Proposals were evaluated under the OCI plan subfactor and security factor on a pass/fail basis; proposals were rated under the remaining non-cost factors and subfactors on an adjectival basis.
Based on his review of the evaluation record, the source selection authority (SSA) concluded that Scitor’s technical superiority outweighed its higher cost and made award to Scitor. MCR challenged the award. In response to the protest, CIA proposed corrective action, including appointment of a new SSA and contracting officer to re-evaluate the proposals; consideration of whether an impaired objectivity OCI existed for work performed by both offerors; and a new award determination.
In implementing the corrective action, the agency issued requests to both offerors for additional information concerning their performance under current and recent IC contracts and followed up with clarification requests. After reviewing the responses, the contracting officer conducted interviews with government personnel responsible for administering the prior contracts in order to arrive at an assessment of OCI risk. Based on his review, the contracting officer concluded that MCR had a medium risk OCI under 2 of 7 contracts and that Scitor had a medium risk OCI in 2 of 16. Thereafter, the SSA prepared a seven-page waiver request. The request included a description of the OCI concern and potential effect if not avoided, neutralized, or mitigated, and the government’s interest in using the offerors notwithstanding the OCI concerns. The designated official approved the waiver.
SSA explained that Scitor’s and MCR’s roles under existing and past contracts presented conflicting interests that theoretically might bias their judgment in performing the RFP work. Given the limited number of cleared estimators and the lack of competition that would result from eliminating Scitor from the procurement, the SSA reasoned that, even if MCR were deemed not to have an OCI similar to Scitor’s, it was in the government’s interest to acquire the services competitively in order to obtain the best value, and that waiver of the OCIs therefore was justified.
MCR asserts that it was unreasonable for CIA to waive Scitor’s OCI for several reasons. For example, it asserts that the agency unreasonable considered the offerors’ OCIs as equivalent because MCR’s OCI allegedly could be easily mitigated. GAO states that under FAR subpart 9.5, when the facts of a procurement raise a concern that a potential awardee might have an OCI, the agency must determine whether an actual or apparent OCI will arise, and whether the firm should be excluded from the competition. The specific responsibility to avoid, neutralize or mitigate a potential significant conflict of interest lies with the cognizant contracting officer. As an alternative, the agency head or a designee may waive any general rule or procedure of determining that its application in a particular situation would not be in the Government’s interest. Any request for waiver must be in writing, shall set forth the extent of the conflict, and requires approval by the agency head or a designee.
In this case, the SSA made a written request for a waiver from CIA’s Chief of Acquisition Services, describing the OCI concern with both offerors; the potential effect if not avoided, neutralized, or mitigated; and, the government’s interest in allowing the offerors to compete for the award notwithstanding the OCI concerns. After reviewing the request, the designated official approved the waiver. GAO states that CIA has met the requirements of FAR § 9.504 and MCR’s assertions to the contrary provide no basis to object to that waiver.
MCR also asserts that the evaluation of its technical proposal under each factor was unreasonable. In considering a protest of an agency’s proposal evaluation, GAO’s review is confined to determining whether the evaluation was reasonable and consistent with the terms of the solicitation and applicable statutes and regulations. GAO’s review of the record shows that the agency reasonably determined that, under the technical approach subfactor, the proposal lacked detail as to how the protester would accomplish three of the required subtasks, and demonstrated only a limited depth of experience in cost analysis in several required areas. Also, under the transition plan subfactor, MCR’s proposal lacked the strategy to mitigate risk to ongoing operations if grants of security access were delayed.
MCR asserts that the agency improperly evaluated the Scitor’s proposal under the past performance factor. GAO states that the evaluation of Scitor’s past performance was reasonable where the RFP specifically provided for consideration of subcontractor past performance, and did not prohibit an offeror from proposing subcontractor personnel for key positions. Thus, the agency properly considered Scitor’s proposed subcontractor’s relevant past performance. In its evaluation, the agency found that the subcontractor’s work on two cost estimating and analysis support contracts involved work similar in nature and scope to the RFP. The agency also reviewed Scitor’s three past performance references and found each to be similar in nature and scope to the RFP.
Finally, MCR asserts that the cost-technical tradeoff decision was neither reasonable nor adequately thorough. GAO states that where the RFP allows for a cost-technical tradeoff, the agency has discretion to select a higher-cost, technically higher-rated proposal if doing so is in the government’s best interest and is consistent with the solicitation’s stated evaluation and source selection scheme. The agency’s judgments are governed only by the tests of rationality and consistency with the stated evaluation criteria.
GAO finds that the tradeoff and source selection were reasonable. The RFP made non-cost factors approximately equal to cost. Here, the evaluation record makes clear the superiority of Scitor’s proposal. In making her source selection, the SSA prepared a detailed decision document comparing the proposals and specifically identified the advantages she found in Scitor’s proposal. Her selection decision expressly addressed the potential OCIs for both offerors and, while it did not discuss the risks in detail, it specifically referred to the SSA’s own waiver request discussing the offerors’ relative OCIs in detail. MCR’s belief that the cost premium is too great constitutes no more than disagreement with the agency’s judgment, and is not sufficient to establish that the tradeoff was unreasonable. The protest is denied