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Pre and Post Award Bid Protest

AT&T Protests Contract Awarded to Verizon

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AT&T® protested the award of a contract to Verizon® Business Network Systems, Inc. issued by the Social Security Administration (SSA). AT&T asserted Verizon had an organizational conflict of interest (OCI) that should have prevented it from receiving the award. The U.S. Government Accountability Office sustained its protest.

Background

The SSA’s Next Generation Telephony Project (NGTP) consisted of three telephone systems: Headquarters Telephone System (HTS), Telephone System Replacement Project (TSRP), and the National 800 Number Network (N8NN). The HTS provides voice services for SSA headquarters. TSRP provides voice services for 1,500 agency locations and handles 90 million calls and 30 million faxes each year. The N8NN provides voice services for the agency’s main toll-free number for the public and handles over 80 million calls per year.

SSA issued the NGTP solicitation in August 2018 for proposals to provide support to replace the agency’s three legacy telephone systems. The RFP sought the award of a single indefinite-quantity (IDIQ) contract in which the SSA would issue fixed-price, time-and-materials, and labor-hour task orders. The contract was for a 1-year base period, nine 1-year options, and one 6-month option. The contractor would provide “telephony, video, presence, Web-based applications, and Contract Center services in an enterprise solution on the SSANet.”

The RFP indicated proposals would be evaluated in three phases. Proposals would be evaluated for compliance with Section 508 accessibility requirements. Proposals with the highest ratings would advance to phase II where they would be evaluated on price and the following non-price factors: NGTP system requirements, technical approach, management approach, relevant experience, and past experience. The non-price factors were “significantly more important than price.” Phase III evaluated whether the awardee presented an acceptable level of risk for supply chain management.

In July 2019, SSA selected Verizon’s proposal for the contract award. Two other offerors filed a protest with GAO challenging the award. SSA informed GAO it would take corrective action by canceling the award to Verizon, reopening discussions with offerors, requesting revised proposals, and making a new contract award. GAO found the agency’s corrective action rendered the protests academic and dismissed them.

In September 2019, the SSA issued a task order to Verizon and CenturyLink. In October, AT&T argued the issuance of the SSANet task order to Verizon created an impaired objectivity organizational conflict of interest (OCI) that should prevent it from competing for the NGTP contract. The contracting officer found no potential for organizational conflict of interest (OCI) and an amendment to the RFP was required because it did not contain provisions addressing organizational conflicts of interest (OCIs). The SSA issued solicitation amendment No. 0004 to the NGTP solicitation stating the agency would conduct discussions and solicit revised proposals. It included a clause requiring offerors to identify potential organizational conflicts of interest (OCIs) that could arise from the award of the contract and propose a plan to mitigate such conflicts.

The SSA concluded revised proposals from AT&T, Verizon, and a third offeror satisfied phase I of the 508 compliance requirements. The contracting officer noted Verizon’s proposal was “slightly greater overall non-price benefit and lower overall performance risk than AT&T’s proposal” and was a lower price. The contracting officer concluded Verizon’s proposal was the ‘best value’ to the Government. AT&T protested the agency’s decision.

Organizational Conflict of Interest

AT&T asserted the NGTP contract award to Verizon created an organizational conflict of interest (OCI) because its ability to perform the contract requirements would be impaired by its role as contract support for the SSANET task order. NTP statement of work (SOW) required the contract to advise the agency of any problems with the SSANet that would affect the performance of the NGTP.

The Federal Acquisition Regulation (FAR) requires contracting officials to prevent potential significant conflicts of interest. Organizational conflicts of interest (OCIs) may arise from the bias of ground rules, unequal access to information, and impaired objectivity. Protesters arguing conflicts of interest must identify facts that indicate the existence or potential existence of a conflict. GAO noted it conducts reviews of organizational conflict of interest (OCI) investigations for reasonableness. It stated it would not substitute its judgment for “the agency’s absent clear evidence that the agency’s conclusion is unreasonable.”

Timeliness

The SSA and Verizon asserted AT&T’s protest was untimely. SSA argued the protest should have been filed in connection with the initial award in July 2019. The GAO explained, a protester is not required to file a protest that another contractor has an organizational conflict of interest (OCI) until after it has been selected for an award. In cases where an agency advises the protester a potentially conflicted firm is eligible for the award, the protester cannot wait until an award has been made to file its protest. SSA’s request for additional information from offers for the agency’s organizational conflict of interest (OCI) analysis indicated it did not make a final decision with respect to conflicts.

SSA argued AT&T’s protest was untimely because it knew or should have known the result of the issuance of RFP amendment No. 0004 indicated Verizon eligible for the award. AT&T argued the protest was timely because offerors were required to submit an organizational conflict of interest (OCI) mitigation plan and were notified that SSA would evaluate them prior to award. The amendment contained an organizational conflict of interest (OCI) provision that would evaluate an offeror’s mitigation plan and could disqualify an offeror based on that plan. Under the circumstances described, GAO did not find SSA communicated through the amendment that it made a final decision regarding Verizon’s eligibility for award under the new provision. The GAO concluded the amendment did not require the protester to file a pre-award protest.

Contracting Officer’s Findings

The contracting officer concluded Verizon did not have a disqualifying organizational conflict of interest (OCI). The GAO concluded these findings were unreasonable and unsupported by the record. The officer determined there was no conflict because the SOW did not require the NGTP contractor to evaluate the performance of the SSANet contractor. It required it to advise the SSA if the quality and performance of the services provided affect the NGTP contractor’s ability to perform the contract. The GAO found this a “distinction without a difference.” AT&T argued section 6.3.3 of the SOW required the contractor to assess whether the agency-provided SSANet services met the needs of the NGTP, and assess the quality of those services. The NGTP contractor was required to state whether there were problems with the services provided by the SSANet contractor that affected the NGTP. AT&T argued this requirement caused a conflict in Verizon advising the SSA about problems it experiences in performing the NGTP contract that is caused by the performance of its SSANet task order.

Conclusion

GAO sustained the protest. It found the SSA unreasonably concluded there was no potential conflict associated with the contract award to Verizon. It recommended the agency conduct a new organizational conflict of interest (OCI) evaluation for potential conflicts of interest. For more information on how to protest a contract award due to an organizational conflict of interest, contact Whitcomb Selinsky, PC.

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About the AuthorWhitcomb, Selinsky, PC

Whitcomb, Selinsky, PC is a full service law firm serving clients’ diverse legal needs. Our focus is in helping people in their interactions with federal, state and local governments.

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