United States: GAO Dismisses Protest Based On A Post-Hoc Waiver Of OCIs

Last Updated: March 4 2013
Article by Bradley D. Wine, Tina D. Reynolds and K. Alyse Latour

The U.S. Government Accountability Office (GAO) recently opened the door for government agencies to use their waiver authority under the Federal Acquisition Regulation (FAR), Subpart 9.5, during a protest to render academic a protester's claim of potential organizational conflicts of interest (OCI). AT&T Government Solutions, Inc., B-407720, B-407720.2, Jan. 30, 2013, 2013 CPD ¶ __. Although waivers of OCIs under FAR Subpart 9.5 are not unusual, it is uncommon for an agency to waive an OCI during the pendency of a protest, as the Marine Corps did in AT&T Government Solutions, Inc.

AT&T'S ALLEGATIONS OF POTENTIAL OCIS

On July 3, 2012, the Marine Corps issued a request for proposals to contractors holding a Navy SeaPort-e indefinite-delivery, indefinite-quantity (ID/IQ) contract for a task order to provide IT networking support services for the Marine Corps' secret Internet protocol router network (SIPRNet) at five Marine Corps installations. After receipt and evaluation of proposals, the Marine Corps awarded the task order to Jacobs Technology, Inc. ("Jacobs") on September 27, 2012.

Disappointed offeror AT&T Government Solutions, Inc. (AT&T) filed an initial agency-level protest, which was dismissed. On October 23, 2012, AT&T filed its protest at the GAO, alleging that the Marine Corps failed to meaningfully consider the potential OCI presented by awarding the task order to Jacobs. In particular, AT&T claimed that Jacobs' role as a support contractor to the Marine Corps on a related engineering and acquisition support task order in support of the program manager, Marine Corps network and infrastructure services (PM MCNIS) created two types of OCIs (as defined under FAR Subpart 9.5). First, Jacobs had access to non-public budget information and technical requirements that may have provided Jacobs with a competitive advantage in preparing its proposal. Second, Jacobs would be unable to render impartial advice to the Marine Corps due to its role as both the PM MCNIS engineering and acquisition support contractor and the SIPRNet support service contractor.

In an investigation prompted by the protest, the agency determined that no actual or potential OCI existed. During an outcome prediction alternative dispute resolution conference, however, the GAO attorney assigned to the protest indicated that the GAO was inclined to sustain the protest because the record showed that the agency failed to meaningfully consider the potential OCIs alleged by AT&T.

THE AGENCY'S WAIVER OF OCIS

Three days before the 100-day statutory deadline for the GAO to resolve the protest, the Marine Corps notified the GAO that it had waived any OCIs relating to the award to Jacobs. Pursuant to Section 9.503 of the FAR, the head or designee "may waive any general rule or procedure of this subpart by determining that its application in a particular situation would not be in the Government's interest."

The head of the contracting activity (HCA) for the Marine Corps exercised the authority of FAR § 9.503 and waived "any and all residual OCI concerns and potential impacts which are not completely eliminated or otherwise neutralized or mitigated by the circumstances described in the analysis developed in support of this waiver." The HCA wrote that he had found that the risk of any potential or real OCI under the task order was negligible to non-existent, the potential residual impact of the OCI was insignificant in comparison to the estimated annual savings to be derived from award to Jacobs as well as the substantive impact of disrupted support to the SIPRNet, and that re-procurement was not an option due to the limited number of qualified sources and the loss of critical support services during the time needed to conduct a new procurement.

GAO'S DECISION

Relying on the agency's waiver of any OCIs with respect to Jacobs, the GAO dismissed the protest on January 30, 2013. The GAO held that the FAR permitted the Marine Corps to waive any general rules or procedures within Subpart 9.5, and since AT&T's protest arose from the rules and procedures of Subpart 9.5, the waiver rendered AT&T's claims academic.

IMPLICATIONS FOR FUTURE PROTESTS

The decision in AT&T Government Solutions, Inc. seems to confirm the GAO's broad view of the waiver authority in FAR Subpart 9.5. Although the GAO has consistently held that agencies can use the waiver provision as an alternative to avoiding, neutralizing, or mitigating an OCI, agencies typically only exercise this option during the decision-making process or through corrective action. In this case, the Marine Corps waited until just days before the GAO's decision was due to execute a waiver. The outcome in this protest underscores the impact OCIs can have on a procurement, as well as the virtually unlimited power of the agency to waive OCIs. In the wake of AT&T Government Solutions, Inc., we may see other government agencies attempt to defeat claims of OCIs by exercising their waiver authority following the filing of OCI-related protests. Future protests may challenge the exercise of such waivers where they are clearly inappropriate, but this case may have a chilling effect on OCI challenges in the near term.

The full decision can be found here.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Bradley D. Wine
Tina D. Reynolds
 
In association with
Related Video
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Law Practice Management
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.