Organizational conflicts of interest (OCIs) are perpetually thorny issues in federal procurement that contracting officers are required to identify and evaluate “as early in the acquisition process as possible.”[1] Although the Government Accountability Office (GAO) has identified several OCI categories,[2] two recent decisions highlight so-called impaired objectivity OCIs, which arise when a contractor’s ability to provide objective advice or recommendations to the government will be undermined by competing interests. The two decisions serve as an important reminder of what does — and does not — qualify as meaningful consideration by the contracting officer in such situations, and how prospective contractors can assist in identifying and mitigating such OCIs.

Visual Connections, LLC

In December 2018, GAO denied a protest by Visual Connections, LLC of the award of a Department of Health and Human Services (DHHS) task order to CollabraLink for the design of a system to facilitate certain state Medicare and Medicaid programs. The protester contended that the agency had failed to meaningfully consider whether a proposed subcontractor, New Wave, presented an impaired objectivity OCI. The task order solicitation was issued under a multiple award IDIQ contract for the design, development, implementation, operation, and maintenance of related systems, under which New Wave had earlier been awarded a separate task order to provide systems integration services. The solicitation provided that holding another task order or contract under the same program could create a conflict of interest, and required offerors and their subcontractors to submit a conflict of interest and compliance program with their proposals.

A key factor underpinning GAO’s decision to deny the protest was that the agency required both CollabraLink and New Wave to submit an OCI mitigation plan due to New Wave’s role as the systems integrator under the separate task order. The submitted plan outlined multiple mitigation strategies, and the Contracting Officer concluded that no OCI existed that would preclude award. Moreover, the solicitation clearly defined the contractor’s and agency’s roles regarding ultimate decision responsibility; although New Wave would monitor other task order holders’ performance and report any scheduling issues to the agency, it would not evaluate or otherwise rate those contractors’ performance. And New Wave had no incentive to provide less than objective advice to CMS — indeed, New Wave could receive a negative performance assessment for failing to provide accurate reports to the agency. Under these circumstances, GAO held, the contracting officer reasonably concluded that the conflict was mitigated.

Safal Partners, Inc.

Shortly afterwards, in January 2019, GAO sustained a protest alleging an impaired objectivity OCI. In Safal Partners, the Department of Education (DOE) had awarded a contract to MSG, which proposed to subcontract certain technical assistance services to WestEd. Safal protested that DOE failed to meaningfully consider whether WestEd had an OCI, because WestEd held a separate contract with the agency that required it to identify DOE grantees who would benefit from technical assistance. That technical assistance work, however, is the same work that MSG proposed subcontracting to WestEd. Safal argued that WestEd could enrich itself by recommending grantees for technical assistance under its prime contract, and then providing that assistance under the subcontract.

As in Visual Connections, the contracting officer in Safal Partners emphasized that the agency retained ultimate responsibility for directing which grantees would receive technical assistance. He concluded that WestEd could not “funnel” work to itself, and that this lack of authority mitigated any potential OCI. Noting that “well settled” GAO precedent establishes that a contractor who is expected to offer input to the agency may have an OCI even where the agency retains final decision-making authority, GAO deemed the contracting officer’s analysis unreasonable because it applied an improper legal standard. GAO sustained the protest and recommended that the agency conduct a new OCI analysis.

Though there is arguably some tension between Visual Connections and Safal Partners in GAO’s treatment of the “ultimate decision responsibility” issue, the OCI analyses in the two cases were markedly different. Unlike in Visual Connections, the contracting officer in Safal Partners did not request an OCI mitigation plan. In fact, he was unaware of any potential OCI until the protest was filed. And his OCI analysis could fairly be described as cursory — he did not even explicitly decide whether an OCI existed. He just concluded that there was no OCI problem because the agency would make the ultimate call on who would receive technical assistance. Had the agency’s retention of ultimate decision authority been just one factor in the contracting officer’s OCI analysis in Safal Partners rather than the sole factor, GAO may well have denied the protest.

Key Takeaways

GAO rarely sustains protests based on alleged OCIs, but when it does, contractors should take note. These two decisions not only illustrate what may constitute meaningful consideration for purposes of an OCI analysis, but also serve as a reminder that impaired objectivity OCIs may arise even where the agency retains ultimate decision authority.

Contractors who recognize that their work under one contract or task order may present an impaired objectivity OCI under another should be proactive in determining ways to mitigate the potential OCI. Subcontracting the problematic work is one way contractors frequently reduce OCI risks. Yet, GAO’s recent decisions demonstrate that subcontractors may create OCI concerns of their own — particularly in multiple award task order procurements under large federal programs, where separate task orders are related to a single program. Preemptively drafting formal OCI mitigation plans, or giving due consideration to OCIs as part of a teaming agreement, can facilitate identifying and mitigating OCIs early in the procurement process.

The decisions also provide an important reminder that offerors considering a protest alleging an impaired objectivity OCI should not forget the awardee’s subcontractors in their analysis.

[1] 48 C.F.R. § 9.504.

[2] The other two categories include “unequal access to information” and “biased ground rules” OCIs.