Most folks wouldn’t think twice of attending a longstanding weekly social event with friends to have dinner and play some foosball—especially pre-COVID.
But in the government contracting world, even that could lead to an Organizational Conflict of Interest (OCI), which, in this case is likely to cost NASA over two years of work and a company a $650 million contract.
Now that’s a spinner.
In our experience, there’s a lot of confusion out there about OCIs. The FAR and the Government Accountability Office say there are three basic types of OCIs: unequal access to information, biased ground rules, and impaired objectivity. Most of the time, folks think of the contractor as the one with the conflict and the agency defending against it. But as a recent GAO decision makes clear, conflicts—not unlike foosball—take at least two players.
In the protest, Teledyne Brown Engineering, Inc., B-418835 et. al (Sept. 25, 2020) GAO focused on a fundamental but rarely discussed aspect of OCIs, that the appearance of a conflict is as bad as the conflict itself.
In late 2017, NASA put a team together to start working on combining two contracts at the Marshall Space Flight Center in Huntsville, Alabama, into what it calls the Marshall operations services, systems and integration (“MOSSI”) contract.
That group began the complicated work of merging the Huntsville operations support center (HOSC) contract and the mission operations and integration (MO&I) contract into one solicitation. They also had to conduct market research, develop an acquisition strategy, and determine whether the work could be set aside for small businesses.
To lead the team NASA selected a person, referred to in the GAO opinion as “Mr. X”—if you need to know why this is hilarious to me please go watch the Simpson’s season 12 episode “The Computer Wore Menace Shoes”. NASA later said he was “vital to the successful completion” of the project.
Mr. X told GAO that for the last 10 years he has attended this weekly social gathering with friends for “camaraderie, friendship, dinner, and to engage in competitive foosball.” The group includes one “senior-level” employee for COLSA Corporation, an incumbent contractor on one of the two soon-to-be-merged contracts. Another attendee works for KBR, Inc., an aerospace and defense company.
Despite his mysterious name, Mr. X made no effort to hide his social life from NASA. In April 2018, he told NASA about these gatherings and was advised to be careful to avoid the appearance of a conflict. In September of that year, he asked for a “impartiality determination” from legal. Before the ethics office could render an opinion, NASA appointed him to the Source Evaluation Board, first as the chairman and then as a voting member.
Thereafter, NASA’s ethics attorneys provided an opinion saying that “the long history of the private dinners hosted by civil servants and contractors, including [the COLSA employee], and attended by [Mr. X], raises an appearance concern.” The counsel advised either that Mr. X not serve on the board or stop going to the dinners until after the procurement had ended.
Neither happened. Instead, NASA adopted a mitigation plan. It required Mr. X to abide by general procurement integrity regulations, “not discuss or disclose SEB activities outside the SEB-controlled access area” and “not evaluate any proposal involving COLSA.”
NASA published the solicitation on May 1, 2019, and Proposals were due in June 2019. For the better part of a year, the board evaluated proposals. It announced on May 21 that the award would go to SGT, Inc., an offeror that during the course of the procurement had been acquired by KBR and was using COLSA as a major subcontractor. A competitor protested, arguing that Mr. X’s relationship with the two contractors formed an OCI.
GAO ultimately found that NASA’s mitigation plan did not do enough and that NASA failed to investigate and/or resolve the potential conflict. It noted that the FAR requires that “Government business shall be conducted in a manner above reproach” adding that “Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct. The general rule is to avoid strictly any conflict of interest or even the appearance of a conflict of interest in Government-contractor relationships.”
GAO recommended that NASA terminate the contract, cancel the solicitation, and start over. It said that “the apparent conflict fundamentally undercuts any confidence in the integrity of the acquisition”.
In other words, just the appearance this conflict was bad enough to toss out over two years of work because the public has to trust that $650 million isn’t being doled out over a game of foosball.