Teledyne Brown Engineering, Inc. protested a contract awarded to SGT, LCC by the National Aeronautics and Space Administration (NASA). The acquisition was for ground systems and operations services at Marshall Space Flight Center (MSFC) in Alabama. Teledyne asserted NASA misevaluated proposals, improperly engaged in discussions with SGT, and made an improper source selection decision. It argued there were conflicts of interest between NASA employees and connections they had with COLSA, a major subcontractor for the awardee SGT, concerning their acquisition.
The request for proposals (RFP) was based on a best-value tradeoff of a cost-plus award fee type contract for solicited services of one year and six option periods. Proposals were to be evaluated on three equally weighted factors: mission suitability, past performance, and cost. Mission suitability and past performance factors in combination were rated “significantly more important” than cost. The mission suitability factors included technical staffing and approach, management and innovation approach, and small business. NASA also advised contractors it would perform a cost realism evaluation to determine the realism of the offerors’ proposed costs.
NASA selected SGT for the contract award based on initial proposals. It found SGT and Teledyne were “essentially equal under the non-cost factors” and chose SGT on its lower evaluated cost. Teledyne filed a protest shortly thereafter. The Government Accountability Office (GAO) reviewed Teledyne’s allegations and concluded that a NASA employee, who participated throughout the acquisition process, had a personal conflict of interest
History of Acquisition
The solicitation was for the Marshall operations services and integration (MOSSI) contract. The contract was to consolidate the Huntsville Operations Support Center (HOSC) contract and the mission operation and integration (MO&I) contract. Teledyne is the incumbent contractor for the MO&I contract, while COLSA Corporation is the incumbent for the HOSC contract.
Teledyne argued the NASA employee who participated in the acquisition had an improper personal conflict of interest. It stated a NASA employee (referred to as Mr. X) had an ongoing relationship with an individual who held a high-level position with COLSA, the predecessor prime contractor for the HOSC contract. NASA stated it was aware of Mr. X’s relationship but argued it took measures to eliminate the possibility of prejudice in favor of SGT or against other offerors. The GAO found the agency’s attempt to mitigate the effect of the relationship insufficient to avoid the appearance of conflict.
The GAO noted Mr. X performed a leadership role in the development of every aspect of the agency’s acquisition. This included formulating procurement strategy, contracting approaches, and cost estimates. The record showed Mr. X participated in the evaluation of proposals, was a voting member of the source evaluation board (SEB) responsible for assigning scores to proposals, and briefed the source selection authority (SSA) on the results of the agency’s evaluation.
The GAO stated the record showed that during this time Mr. X engaged in social gatherings with a senior-level employee who worked for COLS and another individual who worked for KBR Wyle, which merged with SGT during the acquisition. NASA’s ethics counsel found the level of scrutiny on Mr. X heightened due to his role as the MOSSI SEB Chair and his role as a voting member. It stated all SEB members should be vigilant to avoid any scenario that would cause a “reasonable person to question their objectivity.”
The Federal Acquisition Regulation (FAR) states Government business shall be conducted “with complete impartiality and with preferential treatment for none.” Conflict of interest or even appearance of it is to be avoided in Government-contractor relationships. FAR 3.101-1 states “the existence of an actual or apparent a conflict of interest is sufficient to taint the procurement.”
Areas of Concern
The GAO found several areas of concern with Mr. X’s continued involvement in the acquisition. It noted that despite the ethics counsel's opinion that Mr. X should be removed from the SEB or refrain from attending the regular social gatherings, NASA continued to allow Mr. X to be a member of the SEB. The GAO also found the agency’s failure to consider Mr. X’s participation in weekly social gatherings or to bring attention to the ethics attorney undermined the reasonableness of the agency’s decision to allow him to continue serving as a member of the SEB. It did not find NASA’s mitigation measures protected the possibility of Mr. X influencing the evaluation of proposals from offerors other than SGT. It did not find it acceptable for Mr. X to vote on the scoring of the SGT proposal. Government conduct must be “such that they would have no reluctance to make full public disclosure of their actions.
The GAO concluded it did not need to resolve whether Mr. X’s participation in the acquisition resulted in actual prejudice against the offerors. It found the record established a conflict or apparent conflict of interest existed, the agency did not resolve the issue, and the integrity of the procurement process was not maintained. The GAO presumed Teledyne was prejudiced.
The Government Accountability Office (GAO) found the record showed extensive participation in social gatherings between Mr. X and the senior-level employee who worked for COLS and concluded the conflict was not adequately addressed. It recommended NASA terminate the contract awarded to SGT “for the convenience of the government,” cancel the RFP, and “proceed without the involvement of individuals who have a conflict of interest.” For more information on conflicts of interest and government contracting, contact us. We have a team of government contract attorneys ready to help you today.