A pair of recent Government Accountability Office (GAO) bid protest decisions addressing impaired objectivity organizational conflicts of interest (OCIs) highlight the fact-specific and highly discretionary nature of a contracting officer’s OCI investigation, as well as the important role that contractors themselves can play in supporting such an investigation. We discuss these two protests and the key takeaways for contractors below.
Background
The Federal Acquisition Regulation (FAR) defines an OCI as a situation where “because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.” FAR 2.101. There are three primary types of OCIs: (1) impaired objectivity, (2) biased ground rules, and (3) unequal access to information. Impaired objectivity OCIs, which are the subject of these two protests, “exist[] where, because of the nature of a firm’s actual or potential work under one contract, it may be unable to provide objective judgments to the government in performing under another government contract.” Serco Inc., B-404033 et al., Dec. 27, 2010, 2010 CPD ¶ 302 at 2.
Protest Denied: Lockheed Martin Corp., B-423294, May 2, 2025
In Lockheed Martin Corp., B-423294, May 2, 2025, GAO denied a protest where the record showed that the contracting officer meaningfully considered whether the awardee had an OCI, and there was no clear evidence the agency’s conclusions were unreasonable. The protester argued that the awardee would have a potential impaired objectivity OCI in performing the second phase of a procurement to design, build, and maintain Tactical Operations Center – Light (TOC-L) prototype systems because the awardee held another contract for CBC2 software—a “key subsystem” of the TOC-L system. The agency expected the TOC-L awardee to advise on potential integration of the two systems. Id. at 6.
As part of the OCI investigation, the contracting officer reviewed the scope of work for the two contracts at issue and recognized the risk of a potential impaired objectivity OCI. Id. The contracting officer concluded, however, that any impaired objectivity OCI was mitigated by: “(1) the agency’s ownership of the technical direction and approval authority for all TOC-L products; (2) the notice to all offerors that CBC2 software will be provided as [government-furnished equipment] at a future time, and will not be evaluated as satisfying any particular [] requirement under the [TOC-L contract]; and (3) the agency’s retention of final approval authority for all recommendations made by [the awardee] under the CBC2 contract.” Id.
The protester argued that the agency improperly relied on its final approval authority as mitigation, citing GAO’s previous decision in Safal Partners, Inc., B-416937, B-416937.2, Jan. 15, 2019, 2019 CPD ¶ 20 at 10 (sustaining protest where contracting officer’s OCI analysis improperly relied upon contractor’s lack of final approval authority to mitigate impaired objectivity). Id. GAO disagreed, noting that (1) unlike the agency’s conclusory assessment in Safal Partners, the record in Lockheed detailed the specific mechanisms the agency would use to exercise independent oversight and decision-making authority; and (2) “the contracting officer did not rely on government control alone to find that the OCI was mitigated” as the agency “purposefully changed its approach to the procurement” in response to the potential OCI. Id. at 7.
Protest Sustained: DirectViz Solutions, LLC, B-423366 et al., June 11, 2025
In DirectViz Solutions, LLC, B-423366 et al., June 11, 2025, GAO sustained a protest where the record showed that the contracting officer unreasonably concluded there was no possibility of a potential conflict. The protester alleged that the awardee’s provision of cybersecurity information technology support services to the agency’s Global Cyber Center (GCC) conflicted with the awardee’s performance of a separate task order to support the agency’s cyber headquarters, ARCYBER, of which GCC is a subordinate component. Under the ARCYBER task order, the awardee is required “to assist ARCYBER with shaping overarching cyber policies and plans for its subordinate components, which include GCC.” Id.
Following receipt of the protest, the contracting officer conducted two rounds of investigations into potential OCIs, which included reviewing the performance work statement for each task order, declarations from government personnel familiar with each task order, and the awardee’s responses to OCI questionnaires. The contracting officer concluded no OCI existed because the awardee is “not authorized to structure policies for the GCC Government Personnel on the ARCYBER Task Order” and “does not provide guidance/advice on how the GCC Task Order contractor handles its cyber operations.” Id. at 9.
GAO concluded the investigations were inadequate and the determinations were unsupported by the record. Id. at 11. GAO highlighted five shortcomings in the contracting officer’s analysis: (1) failure to consider the scope of work under each task order; (2) unreasonable reliance on conclusory declarations from agency employees; (3) unreasonable reliance on OCI questionnaire responses by the awardee that “plainly conflicted” with the task order terms; (4) improper reliance on the agency’s final approval of contractor recommendations, because agency approval does not itself mitigate the risk of biased advice; and (5) unreasonable reliance on the irrelevant fact that the two task orders were administered by two different acquisition offices or that the awardee would not be involved in evaluating contractor performance. Id. at 11-13.
Key Takeaways
Reading Lockheed and DirectViz in concert with one another offers three key takeaways for contractors navigating impaired objectivity OCIs:
- Contractors should work with the agency to assess potential OCIs. These cases emphasize the fact-specific nature of identifying, analyzing, and mitigating OCIs. Awardees can support an agency’s OCI investigation by conducting their own analysis of the issue and providing the agency with helpful information even after a protest is filed. (Of course, it is generally advisable to identify and mitigate potential OCIs prior to award when possible).
- Protesters should look for inconsistent or unsupported conclusions by the agency. GAO will not substitute its judgment for the agency’s absent clear evidence that the agency’s conclusion is unreasonable. Protesters must show that the contracting officer’s conclusion is inconsistent with or unsupported by the record; mere disagreement with the agency’s analysis is not enough. Thus, protesters should be on the lookout for instances where the contracting officer’s review is cursory and/or its conclusions illogical.
- Contractors should proactively develop OCI mitigation plans. Requiring final approval by government personnel is generally insufficient to conclusively mitigate the risk of an impaired objectivity OCI but, depending on the circumstances, can be part of a broader mitigation plan that effectively addresses the risk of biased advice. Contractors facing potential impaired objectivity OCIs should develop mitigation plans that do not rely solely on the government’s independent oversight and decision-making authority.
We will continue to monitor OCI developments on Covington’s Inside Government Contracts blog.