THIS OPINION WAS INITIALLY ISSUED UNDER
PROTECTIVE ORDER AND IS BEING RELEASED
TO THE PUBLIC IN REDACTED FORM ON MAY 25, 1995
__________________________________
DENIED: April 13, 1995
__________________________________
GSBCA 13139-P, 13155-P, 13156-P[foot #] 1
CAELUM RESEARCH CORPORATION,
Protester,
and
PRODUCTIVE DATA SYSTEMS, INC.,
Protester/Intervenor,
v.
DEPARTMENT OF TRANSPORTATION,
Respondent,
and
MODERN TECHNOLOGY SYSTEMS, INCORPORATED,
Intervenor.
William L. Walsh, Jr., Lars E. Anderson, J. Scott Hommer,
III, and Wm. Craig Dubishar of Venable, Baetjer and Howard,
McLean, VA, counsel for Protester Caelum Research Corporation.
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[foot #] 1 GSBCA 13139-P refers to Caelum Research
Corporation's (Caelum's) protest; GSBCA 13155-P and 13156-P refer
to the protests which survived when Anstec, Inc. (Anstec)
withdrew its protest, GSBCA 13087-P. Caelum and Productive Data
Systems, Inc. (PDS) had timely intervened in Anstec's original
protest against this award. When Anstec withdrew its protest,
the Board permitted Caelum and PDS to pursue it, and docketed
these protests as GSBCA 13155-P and 13156-P, respectively.
----------- FOOTNOTE ENDS -----------
Ronald S. Perlman and Ellen F. Randel of Porter, Wright,
Morris & Arthur, Washington, DC, counsel for Protester/Intervenor
Productive Data Systems, Inc.
Cathryn G. Cason and A. L. Haizlip, Federal Aviation
Administration, Department of Transportation, Oklahoma City, OK,
counsel for Respondent.
Michael W. Clancy, Richard P. Rector, and Kevin P. Mullen of
Piper & Marbury, Washington, DC, counsel for Intervenor Modern
Technology Systems, Incorporated.
Before Board Judges HYATT, WILLIAMS, and DeGRAFF.
WILLIAMS, Board Judge.
In this protest, Caelum challenges on numerous grounds the
award of a contract for federal information processing (FIPs)
services by the Federal Aviation Administration (FAA) to Modern
Technology Systems, Inc. (MTS).[foot #] 2 First,
protester alleges a violation of the Procurement Integrity Act
(the Act) based upon a former FAA official's subsequent
employment with a subcontractor of the awardee. Caelum contends
that this individual was a procurement official within the
meaning of the Act in that he participated personally and
substantially in the procurement while in Government. Further,
Caelum claims this individual's participation as an employee of
MTS' subcontractor OAO Corporation (OAO) in a "red team" review
of MTS' proposal tainted the award, conferred an unfair
competitive advantage on MTS, and requires the disqualification
of MTS/OAO from this procurement. Caelum also claims that the
agency failed to conduct an investigation of a possible violation
of the Act as mandated by Federal Acquisition Regulation
(FAR) 3.104-11.
We conclude that protester has failed to meet its burden of
proving a violation of the Act; thus, we deny these grounds of
protest. We agree that FAA failed to conduct an investigation of
possible violations of the Act, but, because we resolve the
procurement integrity issue in this proceeding, we do not remand
the matter to the agency for further investigation. Because in
this case the fully developed record contains no evidence that
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[foot #] 2 By letter dated January 24, 1995,
protester/intervenor PDS advised the Board that it would be
unable to participate actively in the protest proceedings and
would not file briefs or attend the hearing. Letter from
Ronald S. Perlman, Esq., to the Board at 1 (Jan. 24, 1995).
Thus, only Caelum pursued the case and, for ease of reference,
GSBCA 13139-P, 13155-P, and 13156-P will be referenced as
Caelum's protest. PDS supported Caelum's protest "due to the
procurement integrity violation and because the source selection
decision lacked a rational basis."
----------- FOOTNOTE ENDS -----------
the violation adversely impacted Caelum's ability to compete for
the award, Caelum suffered no prejudice, and we deny this ground
of protest.
In a related count, Caelum claims the award to MTS violates
the FAR prohibitions against organizational conflicts of
interest. Here, Caelum is claiming that MTS/OAO enjoyed an
unfair competitive advantage because the services being procured
were developed under the former FAA employee's supervision and
control. We deny this ground of protest, as the record does not
support this allegation.
Caelum further contends that FAA failed to conduct
meaningful discussions with it and that the best and final offer
(BAFO) process and evaluation was a sham. These allegations stem
from the FAA's policy not to conduct technical discussions with
any offeror as to any technical subfactor which was initially
rated a "2" (satisfactory) or better. Consistent with this, FAA
did not evaluate any information received in an offeror's BAFO if
it related to any technical subfactor which was already rated a
"2" or higher. We deny these grounds of protest because
protester has not demonstrated that it suffered any prejudice.
Caelum has not identified any aspects of its proposal which
contained deficiencies or uncertainties which warranted
discussions. Since FAA also did not engage in discussions with
MTS, the two offerors were treated equally; neither had an
opportunity to have any aspect of its technical proposal
evaluated at BAFO.
Caelum also complains that FAA failed to evaluate offerors'
costs properly. We deny this ground of protest because the
record supports the conclusion that the rates proposed by MTS are
realistic.
Caelum also contends that FAA improperly held post-BAFO
discussions with MTS by soliciting and evaluating information on
its net worth and how MTS would finance the contract. We agree
that FAA improperly conducted post-BAFO discussions, but deny
this ground of protest because Caelum has not demonstrated that
the post-BAFO discussions affected the evaluation or otherwise
prejudiced it. Protester also challenges the best value
determination, claiming the source selection official (SSO)
failed to justify award to the lower priced, lower scored
proposal. We deny this ground of protest, finding that the SSO
deemed the proposals technically equivalent, recognizing that
both offerors would provide the same incumbent personnel and
concluded that, therefore, Caelum's technical proposal was not
worth the $1.6 million cost premium.
Findings of Fact
Facts Relating to Timeliness[foot #] 3
Anstec's Protest
On November 28, 1994, Anstec filed a protest challenging
FAA's award to MTS, GSBCA 13087. Award was made on November 18,
1994. Anstec raised three grounds of protest. First, Anstec
claimed a violation of the Procurement Integrity Act by virtue of
a former FAA employee's subsequent employment with the
subcontractor of the awardee, OAO. Second, Anstec contended that
the agency failed to evaluate proposals correctly and failed to
perform a proper best value analysis. Finally, Anstec claimed
the agency failed to conduct meaningful discussions with it. On
November 29, 1994, FAA's contracting officer notified all
offerors of the Anstec protest.
Caelum's Intervention in Anstec's Protest
On December 1, 1994, Caelum timely intervened in Anstec's
protest as an intervenor of right. Caelum's intervention was
filed eight working days after award. In its intervention Caelum
stated:
It is the position of Caelum that the award to Modern
Technology Systems, Inc. was improper and that the
Board should direct FAA to terminate the award to MTS.
Caelum did not raise any other allegations or grounds of
protest. Caelum did not file a separate protest within ten
working days of contract award or within ten working days of
Anstec's protest.
At the hearing in this protest, Caelum's president explained
that Caelum decided to intervene in Anstec's protest instead of
filing its own because he did not know Anstec, he recognized the
serious nature of a Procurement Integrity Act allegation, and he
wanted to make sure that there was a basis for this allegation.
Transcript at 2024-25.
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[foot #] 3 We deferred MTS' three motions to dismiss the
protests as untimely. The final reply brief relating to these
motions was not filed until January 19, 1995, three working days
prior to the commencement of the hearing. The Board advised the
parties that it would be unable to resolve those motions prior to
the hearing, given the complexity of the issues involved, the
possibility that amplification of the record would assist the
Board, and the tight prehearing schedule. The parties adduced
additional evidence at the hearing relating to these motions.
----------- FOOTNOTE ENDS -----------
Caelum's Responses to Interrogatories
In response to an interrogatory asking when Caelum became
aware of the facts in its intervention in Anstec's protest,
Caelum stated, in pertinent part:
On Tuesday, November 22, 1994, Larry Bennett of
Management of American Consultants and Associates
(MACA) and Bill Blocher of ANSTEC, Inc. called Michael
Yeh of Caelum indicating that federal procurement
integrity laws and regulations had been violated by the
awardee, MTS, and OAO Corporation ("OAO"), the
awardee's major subcontractor. The individuals
indicated that a former FAA employee, Ruble Garner, had
participated in this acquisition on behalf of FAA and
then assisted MTS/OAO in preparing their proposal.
These individuals also indicated that the relationship
of MTS and OAO was more like a joint venture than that
of a prime/subcontractor relationship. A violation of
the federal procurement integrity laws and regulations
would prohibit award to MTS.
On Monday, November 28, 1994, Caelum was provided a
debriefing by the . . . Contracting Officer. The
Contracting Officer informed Caelum that there were no
weaknesses nor deficiencies in Caelum's proposal.
Caelum's cost/price proposal was only slightly higher
than MTS's. Upon information and belief, Caelum's
technical proposal was far superior to MTS's.
Therefore, the best value to the Government, which was
to be the basis for award, required that award be made
to Caelum.
On November 30, 1994, Caelum received a redacted
version of Anstec, Inc.'s Protest to the GSBCA. The
allegations contained in that Protest also helped form
the basis for Caelum's intervention.
Caelum's Response to MTS' Interrogatory No. 3.
Disqualification of Caelum's Counsel
On December 19, 1994, the Board granted MTS' motion to
disqualify Shaw, Pittman, Potts & Trowbridge (Shaw,
Pittman)[foot #] 4 as Caelum's counsel in this protest
on the ground that a partner in the firm had previously
represented MTS and might have acquired confidential and
privileged information relevant to the instant protest -- in
which Caelum's position is adverse to that of MTS.
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[foot #] 4 Shaw, Pittman was denied access to protected
material due to the motion to disqualify.
----------- FOOTNOTE ENDS -----------
During a telephonic conference on December 20, 1994,
Caelum's president introduced Caelum's new counsel, the law firm
of Venable, Baetjer and Howard, and the Board granted new counsel
access to protected material effective on that date. Counsel
obtained the protected protest file on the following day,
December 21, 1994.
Caelum's First Protest
On December 30, 1994, Caelum filed its own protest based
upon information first learned during its new counsel's review of
the protest file, and during depositions on December 22 and
December 23, 1994. Complaint 4. In Count I, Caelum alleged a
violation of the Procurement Integrity Act. This allegation was
based upon a former FAA employee's involvement in this
procurement as an FAA procurement official and subsequently as
program manager for the awardee's subcontractor. Caelum alleged
that this violation of the Procurement Integrity Act required the
termination of the contract award to MTS/OAO as well as
disqualification of the MTS/OAO team from future consideration
for award. Id. 16.
In Count II of its protest, Caelum alleged an improper best
value determination. Caelum pointed out that its proposal was
4.05% higher technically than that of MTS, but only 3.6% higher
in cost. Caelum claimed that because technical merit was more
important than cost the source selection official's decision was
not supported in the record. In addition, Caelum contended that
it should have been determined to have a more complete,
reasonable, and realistic price. Complaint 21.
In Count III, Caelum alleged that FAA failed to conduct
meaningful discussions with it, and treated Caelum in an unequal
manner. In particular, Caelum alleged that the government
officials testified during their depositions that they had been
directed not to conduct discussions with any offeror who scored a
"2," i.e., a satisfactory rating, or higher. Complaint 24.
Caelum's Supplemental Protest
On January 6, 1995, still within ten working days of new
counsel's review of the protest file, Caelum filed a supplemental
protest also based upon information first learned during the
review of the protest file on December 21, 1994, and depositions
taken between December 22, 1994, and January 5, 1995. In its
supplemental protest, Caelum raised several grounds of protest.
First, Caelum alleged a violation of the Procurement Integrity
Act "not previously known to protester." Specifically, Caelum
alleged that Mr. Garner, former chief of the FAA planning and
support division, was determined by an FAA attorney to be a
procurement official within the meaning of the Procurement
Integrity Act and was, therefore, ineligible to assist OAO in
this procurement. Supplemental Protest 12. Second, Caelum
claimed that the agency violated the procurement integrity
regulations at 48 CFR 3.104-11 in that the agency failed to
investigate thoroughly a potential violation of the Procurement
Integrity Act. In Count III, Caelum alleged that award to MTS
violated the FAR prohibitions against organizational conflict of
interest in 48 CFR 9.501 and 9.505. In Count IV, Caelum
reiterated its best value allegations, but added allegations that
significant discriminators were not included in the final source
evaluation board (SEB) report. In Count V, Caelum alleged that
the agency failed to follow the stated evaluation criteria in
that it failed to conduct meaningful discussions with Caelum,
deviated from the solicitation requirements in its evaluation of
BAFOs, and deviated from the solicitation in its evaluation of
costs. In Count VI, Caelum alleged that the agency improperly
held post-BAFO discussions with MTS regarding MTS' net worth and
financing.
Facts Pertinent to the Procurement Integrity Allegation
The Aeronautical Center
The Mike Monroney Aeronautical Center (the Center) in
Oklahoma City, Oklahoma, one of the largest federal procurement
centers in the Southwest, is the central service and support
facility for the FAA and Department of Transportation (DOT) and
employs approximately 4,500 people. Transcript at 761-63. The
Center has an annual procurement budget of approximately
$250 million and purchases a wide variety of products and
services to supply the FAA's national air space system, training,
and major support services. Id. at 763.
Mr. Garner's Career at the Center
Between 1983 and his retirement in August 1993, Ruble Garner
served as a manager in the Center at a GM-15 grade level.
Transcript at 16. Mr. Garner's total career has been in the data
processing field, not the acquisition field. Id. at 293-96,
1762. Beginning in approximately January 1992, Mr. Garner was
"focused on retirement." Id. at 1751, 1772. He "was winding up"
a thirty-five-year professional career and was also "very intent
on leaving things in good order as he left FAA." Id. at 1724.
For his last "couple of years" at FAA, Mr. Garner worked on a
major reorganization incorporating a new project and information
resources management (IRM) responsibilities for the entire Center
into his division's structure. Id. at 1725. When Mr. Garner
left FAA, no one filled his position. Id. at 1772.
Mr. Garner's Responsibilities on the Predecessor Contract
Between 1987 and 1988, Mr. Garner was a member of the source
evaluation board for the predecessor FIPs contract which was
awarded to KenRob.[foot #] 5 Transcript at 27.
KenRob's subcontractor on the predecessor contract was
OAO.[foot #] 6 The predecessor contract encompassed
the same services at issue here.
Between January 1991 and the fall of 1991, Mr. Garner was a
branch manager in the personnel and financial information systems
branch. Transcript at 16, 303. In this position, Mr. Garner had
responsibility for the contract administration of the predecessor
KenRob contract, a significant effort under his responsibility.
Id. at 33, 56. Approximately two years into the KenRob contract,
i.e., in about 1990, in an effort to save costs, KenRob severed
its relationship with OAO. Id. at 312. FAA estimates that, as a
result, approximately $750,000 a year was saved. Id.
The organizations which used the KenRob contract within the
Center wrote procurement requests against the contract, and
Mr. Garner's branch coordinated those efforts for the Center.
Transcript at 34. Each procurement request included a statement
of work, duration, estimated skill level required, and estimated
dollar value for the task. Id. at 35, 57. Mr. Garner reviewed
the task orders pertinent to his organization, probably about
twelve or fifteen a year. Id. at 306. Although Mr. Garner did
not typically review KenRob's response to the Government's task
proposal requests, he did see two to four cost proposals
submitted by KenRob. Id. at 308. During the latter stages of
the KenRob contract, he would see some of the monthly invoices
from KenRob as well as accounting reports. Id. at 56.
In a March 8, 1991, memorandum, Mr. Garner was designated as
an alternate contracting officer's technical representative
(COTR) for the KenRob contract. Protester's Exhibit 29;
Transcript at 1189-90. Mr. Garner was an alternate COTR until
February 1992. Transcript at 1204; Protester's Exhibit 27.
In the fall of 1991, Mr. Garner became the division manager
of AMI-100, the Planning and Support Division of AMI, the IRM arm
of the Center. Transcript at 15-16, 24, 291. The AMI
organization handles the IRM functions for the entire Center as
well as for some additional DOT programs. Id. at 294. All FIPs-
type procurements were supposed to go through the AMI
organization. Id. at 414. Mr. Garner had overall supervision
for personnel, accounting, marketing, and contract administration
within AMI. Id. at 19. There were two suborganizations under his
direction, AMI-110 and AMI-120.
----------- FOOTNOTE BEGINS ---------
[foot #] 5 KenRob is a subcontractor to Caelum in the
FIPs recompetition.
[foot #] 6 OAO is a subcontractor to the awardee of the
FIPs recompetition, MTS.
----------- FOOTNOTE ENDS -----------
AMI-110 was responsible for processing procurement actions
for AMI, coordinating the AMI budget and handling marketing and
contract administration, including monitoring delivery schedules,
cost overrun situations, and requests for equitable adjustments.
Transcript at 18-20. AMI-110 had access to the cost and pricing
proposals submitted by the contractors performing the hundred or
so contracts within its responsibility. Id. at 21.
Mr. Garner's Role with Regard to the FIPs Recompetition
The FIPs recompetition was the largest procurement at the
Center for at least the last two years. Transcript at 1803-04.
At the time he learned of the FIPs recompetition, Mr. Garner was
the division manager of AMI-100, supervising thirty-five to forty
employees. Id. at 53-54, 300. AMI-100 was responsible for
developing the performance work statement (PWS) and
specifications for the contract, polling the users of the
contract to derive the government estimate, and moving the
procurement request forward. Id. at 861. The director of the
IRM branch, Leo Epperson, testified that Mr. Garner, with respect
to the FIPs recompetition, had only "minimal" activities, for
example, determining whether the requirements met his
organization's needs in the microcomputer area. Id. at 1770. At
that time Mr. Garner spent less than one hour a week on the FIPs
contract. Id.
Ms. Cooley, as branch manager of AMI-110, technical
planning, was responsible for planning the FIPs recompetition.
Transcript at 53-54. She was Mr. Garner's direct subordinate,
and he prepared at least two performance appraisals for
Ms. Cooley. Id. at 55. He was familiar with the work that she
did; he talked to her several times a day. Id. at 55. Although
AMI-110 was under Mr. Garner, Mr. Epperson tasked Ms. Cooley
directly and independently. Id. at 1762-63.
Ms. Cooley testified that when she came to AMI in December
1991 as the branch manager of AMI-110, she realized that the FIPs
contract was going to be expiring and she knew it was time to
start the reprocurement. Therefore, she "just took the ball and
ran with it." Transcript at 1502; see also id. at 1549-50. She
testified that Mr. Garner did not direct her to initiate that
action, but that she knew by looking at the contract that she had
to get started. Id. at 1503.
Ms. Cooley also served on the SEB for the FIPs
recompetition. Transcript at 336. Mr. Garner had no personal
knowledge of her work on the SEB and never discussed it with her.
Id. at 314. In the course of supervising Ms. Cooley, Mr. Garner
reviewed estimates of the FIPs resources his managers would
require from this contract and forwarded them to Ms. Cooley for
inclusion in the Center totals. Id. at 391. At times he would
discuss the FIPs recompetition and raise questions such as "how's
it going," "I'm still waiting on the DPA," etc., and Ms. Cooley
would report the status in staff meetings. Id. at 391-92.
Mr. Garner did not recall discussing with Ms. Cooley details
about the FIPs statement of work. Id. Ms. Cooley testified that
she did not share source selection sensitive information with
Mr. Garner. Id. at 1535.
The contracting officer, Ms. Bachman, only recalled one
discussion which she had with Mr. Garner regarding the FIPs
procurement; in the March 1993 time frame when the agency was
initially issuing the solicitation, she contacted Mr. Garner to
ascertain the status of the DPA, and she said he probably was
able to advise her of this. Transcript at 1110.
The Procurement Request
On July 17, 1992, the director of AMI, Mr. Epperson,
circulated a procurement request to initiate the procurement
action to award a new FIPs contract. Supplemental Protest File,
Exhibit 31. The development of the procurement request was under
the responsibility of Mr. Garner as head of AMI-100. Transcript
at 76. This included the PWS, as well as the government
estimate. Id. at 76-77. Ms. Cooley over the course of
approximately a year gathered the information required for the
procurement request. Id. at 62-63. The procurement request was
signed by Mr. Epperson in his capacity as head of the IRM
function for the Center. The procurement request was initialed
by eight individuals including Mr. Garner.
The initials of a representative from each division
indicated that the division's requirements were being met by this
procurement. Transcript at 1765. If no initials for a
particular division were received, the procurement request would
have been sent back and not approved. Id. at 1765-66.
The procurement request indicated that the estimated
acquisition cost for this procurement was $49,002,963.76 and
separately estimated the base-year and the four option-year
costs. Supplemental Protest File, Exhibit 31. The government
estimate contained in the procurement request did not change.
Transcript at 715, 892. The PWS was attached to the procurement
request. The PWS described the scope of work and included a
detailed description of each employee and skill level. Protest
File, Exhibit 31. There were some changes between the PWS which
was attached to the procurement request in July 1992 and the PWS
that was ultimately issued as part of the solicitation in March
1993 and reissued in September 1993. Transcript at 892-900;
Protest File, Exhibits 33, 34. Many of the labor categories
remained the same, several were fine-tuned, and five new
categories were added. Transcript at 892-900.
Mr. Garner did not recall reviewing the procurement request
for the FIPs recompetition. Transcript at 57. Nor did he recall
initialing the procurement request; when asked whether he did,
Mr. Garner testified: "The copy I was shown later in '93 has my
initials on it as a coordinator of that package." Id. He
continued:
Q: Now, you weren't in the habit of initialing
documents that you didn't review, were you?
A. Yes, I'm coordinating on it, and one of my
employees is on this that has--did a detailed
review and that's what I look for.
Q: And that was Ms. Cooley?
A. Yes.
Id. at 60. At the hearing, Ms. Cooley testified that if
Mr. Garner had not initialed the procurement request, it would
have gone forward nonetheless. Id. at 1639. However, during her
deposition, Ms. Cooley testified that if Mr. Garner did not
initial the procurement request, it would not have gone forward.
Id. at 1640.[foot #] 7 Mr. Epperson credibly testified
that he would not have signed off on the procurement request if
Mr. Garner's or another AMI-100 manager's initials had not been
there. Id. at 1765-66.
According to Ms. Cooley, by his initials, Mr. Garner
concurred that the procurement request was correct in form and
format, included a price estimate, and a PWS and was correct
mathematically. Transcript at 1742. Mr. Garner testified that
his initials indicated that his organization had some interest in
what was being acquired under the procurement request and that
for coordination purposes his signature needed to be there. Id.
at 318.
The Attestation of Procurement Integrity
On September 30, 1992, FAA's associate administrator, who
was also the director of the Center, signed an Attestation of
Procurement Integrity Certification as the "approving official."
The attestation provided:
I the undersigned approving official, personally attest
that all persons identified below have executed a
Procurement Integrity Certification and have been
informed of their being designated as procurement
----------- FOOTNOTE BEGINS ---------
[foot #] 7 At the hearing, Ms. Cooley stated that there
were several inaccuracies in her deposition transcript.
Transcript at 1640. The Board, based upon the demeanor of the
witness and other testimony, credits her deposition testimony in
this instance. There were several other inconsistencies
between Ms. Cooley's testimony at trial and her deposition
testimony. See e.g., Id. at 1647-50, 1663-64, 1666.
________ ___
----------- FOOTNOTE ENDS -----------
officials for the procurement set forth on procurement
request No. 2-06093 [the FIPs recompetition].
Protester's Exhibit 6. There followed a list of thirteen
typewritten names with routing symbols, including that of Ruble
G. Garner, AMI-100. The government witnesses uniformly testified
that this attestation of procurement integrity certification was
wrong in that not all of these individuals were procurement
officials for the FIPs recompetition, and had not all been
informed of their being designated procurement officials for this
procurement. This error occurred because the person preparing
the attestation simply copied the list of names from the
procurement request. Transcript at 638, 645. Although the
Center director who was also the source selection official (SSO)
for the FIPs recompetition believed that the attestation was
accurate when he signed it, he learned subsequently in connection
with the protest that it was not. Id. at 796-97.
All persons who might be deemed procurement officials at
some date executed a general procurement integrity certification
which became part of their official personnel files. Transcript
at 1078, 1082-83. Mr. Garner executed such a general procurement
certification. Respondent's Exhibit 43. There were also
separate procurement integrity certifications related
specifically to the FIPs procurement. Respondent's Exhibit 38;
Transcript at 1083. All members of the SEB signed a FIPs-
specific procurement integrity certification. Transcript at
1084; Respondent's Exhibit 38. Mr. Garner never signed a
procurement integrity certification specific to the FIPs
procurement. Transcript at 1091.
Mr. Garner's First Request for a Legal Opinion: Between
January and March 1, 1993
Mr. Garner first contacted an FAA counsel at the Center,
Mr. Rodriguez, between January and March 1, 1993, orally
requesting legal advice on his eligibility to interview for post-
retirement employment. Transcript at 84, 330. Mr. Rodriguez
told Mr. Garner to recuse himself from the FIPs recompetition.
At that time, Mr. Garner also requested one of the managers in
the acquisition organization to search the files for any document
that he may have signed or that designated him as a procurement
official, but the manager found nothing. Id. at 330-31, 360.
Mr. Garner's Recusal from the FIPs Recompetition: March 1,
1993
Following this discussion with FAA counsel, Mr. Garner wrote
the following memorandum dated March 1, 1993, to his supervisor,
the director of AMI:
Leo, I may have the opportunity to discuss future
employment opportunities with contractors that may
compete on government contracts, and I have been
advised by legal counsel to document this action in
writing.
Although I have not personally participated in the
preparation of the statement of work for the recompete
of the Aeronautical Center ADP support contract
(contract currently held by KenRob), I am requesting
that my involvement in this contract and any others
where the Office of Information Services has
involvement be restricted.
After I retire, should the opportunity for employment
be available, I wish to be in a position to discuss my
future with them.
The following is a list of contractors that I may be
discussing employment with. This list includes, but
should not be limited to the following:
KenRob
FKW
OAO
Leo, I am requesting that you provide me a written
response so documentation of this will be in our files
should any questions arise during competition of
procurement actions I may be involved with.
Supplemental Protest File, Exhibit 32.
The next day, after consulting FAA counsel, Mr. Garner's
supervisor issued the following response:
I have reviewed the memorandum requesting your
involvement be restricted in the programming support
recompete so that you may be allowed to seek employment
in these areas after your planned near-term retirement.
I understand that you are not involved in the recompete
of the KenRob contract at this time.
In the future, I request that you have Cheryl Cooley of
your division act in your behalf on any issues that
relate to this contract area. The reputation of the
Office of Information Services is outstanding and I
will depend on you to ensure that this reputation is
supported as you end your government career and look
forward for future opportunities.
Supplemental Protest File, Exhibit 33; Transcript at 1767-68.
Neither Mr. Garner's nor Ms. Cooley's responsibilities changed as
a result of his recusal from the FIPs recompetition. Transcript
at 336-37, 1771. Mr. Epperson informed all division managers of
Mr. Garner's recusal but did not inform the contracting officer.
Id. at 1768. The contracting officer was not aware that
Mr. Garner had recused himself from the FIPs support services
procurement until this protest. Id. at 936-37.
Mr. Garner's "Cold Call" to OAO: March 2, 1993
Shortly after March 2, 1993, Mr. Garner made a "cold call"
to OAO and inquired "as to whether there was an opportunity for
[him] to be employed."[foot #] 8 Transcript at 88. He
spoke with Georgine Terry, an employee in OAO's business
development division. Id. at 88, 92. The solicitation for the
FIPs recompetition was first issued on March 31,
1993.[foot #] 9 Id. at 90. Mr. Garner's call led to
an interview with OAO on May 2, 1993. Id. at 92.
Mr. Garner's Second Request for Legal Advice
On April 22, 1993, an attorney for OAO sent a memorandum to
Georgine Terry at OAO outlining employee restrictions affecting
Ruble G. Garner.[foot #] 10 In that memorandum the
attorney suggested that Mr. Garner notify his agency of the
possibility of negotiations for future employment and seek a
letter of approval. Intervenor's Exhibit 16. The memorandum
recommended specific language to be included in such
notification:
I have become aware of potential employment opportunity
as a consultant utilizing my professional skills. OAO
Corporation has expressed interest in discussing with
me the possibility of future employment.
This company could not be substantially affected in any
way by the performance of my official duties.
I am not involved in any way with negotiations or
supervision of any activity involving OAO.
OAO is aware that it will receive no official or
unofficial favors in connection with any employment
negotiations we may undertake.
----------- FOOTNOTE BEGINS ---------
[foot #] 8 Mr. Garner testified that his supervisor, Leo
Epperson, suggested that he call OAO and gave him Georgine
Terry's name there. Transcript at 103-04. However, Mr. Epperson
did not recall that he suggested that Mr. Garner call OAO. Id.
___
at 1776-77.
[foot #] 9 The solicitation was withdrawn due to lack of
a DPA, but was reissued in virtually identical form on September
15, 1993.
[foot #] 10 OAO waived the attorney-client privilege with
respect to this document. Transcript at 404.
----------- FOOTNOTE ENDS -----------
During the remainder of my employment with the FAA, I
will recuse myself from any matters which involve OAO
in any way.
Id. On April 28, 1993, Mr. Garner sent FAA counsel, Mr.
Rodriguez, a request for legal advice which was virtually
identical to the request suggested by OAO's counsel quoted above.
Intervenor's Exhibit 15; Transcript at 408.
FAA's Response to Mr. Garner's Second Request for Legal
Advice
By memorandum dated April 30, 1993, FAA's legal office
responded to Mr. Garner's request for an opinion letter.
Supplemental Protest File, Exhibit 34. In that response, which
was drafted by Mr. Rodriguez, FAA concluded that Mr. Garner's
interviews with private firms would not violate either
18 U.S.C. 207(a) or the Procurement Integrity Act,
41 U.S.C. 423(f)(1)(A), since Mr. Garner did not personally and
substantially participate in a procurement action which resulted
in the issuance of a solicitation which would lead up to an award
of a contract to any of the interested firms. Transcript at 440;
Supplemental Protest File, Exhibit 34 at 2.
The April 30 memorandum was based only on the
representations which Mr. Garner had made to FAA counsel.
Transcript at 442. At the time he issued the April 30
memorandum, Mr. Rodriguez was not aware of the existence of the
procurement request, the attestation, the FIPs recompetition, or
Mr. Garner's recusal. Id. at 440-46, 450-51. FAA counsel made
no effort to verify any of the representations in Mr. Garner's
April 28 memorandum. Id. at 452, 488.
Mr. Garner's Interview at OAO
On May 2, 1993, Mr. Garner and his wife traveled to
Greenbelt, Maryland, to meet with Ms. Terry and a vice president
of OAO, Bill Hill. Transcript at 92-93. Mr. Hill had been
involved in OAO's effort previously at the Center, when OAO was a
subcontractor to KenRob. Id. at 93. At the time of the
interview, Mr. Garner was still an FAA employee. Id. at 93-94.
Mr. Garner met with Mr. Hill and Ms. Terry for approximately
three to four hours, and OAO paid for the travel expenses related
to the interview for Mr. Garner and his wife. Id. at 95.
When asked whether he discussed the FIPs recompetition
during his interview, Mr. Garner testified:
A: Mr. Hill may have mentioned it. We didn't discuss
any particulars about it.
Transcript at 99. He continued:
The only thing that I can recall that we discussed is
that that was one of the things that they were
considering bidding on. He was explaining about the
OAO Corporation, and that happened to be one of the
things that he mentioned in the conversation.
Id. at 101-02. Mr. Garner testified that Mr. Hill and Ms. Terry
did not discuss with him how he might participate in the
recompetition effort. Id. at 102.
Mr. Garner's First and Second Offers from OAO, "Proposal
Facilitator" and "Transportation Consultant"
In a letter dated May 25, 1993, OAO confirmed its offer "for
the position of proposal facilitator to provide support for the
DOT/FAA/Mike Monroney Aeronautical support services proposal."
Protester's Hearing Exhibit 5. Mr. Garner understood this to
refer to the FIPs recompetition. Transcript at 117-18.
Upon receiving the initial offer from OAO for the "proposal
facilitator" position on May 26,[foot #] 11 Mr. Garner
telephoned the vice president of OAO and advised him that he had
understood he was being hired for a broader position to help
market OAO's capabilities throughout the transportation area.
Transcript at 345. The vice president responded that "OAO had
not just zeroed [in] on . . . the support services contract, but
that they could use Mr. Garner in other aspects of OAO." Id.
Subsequently, on May 27, Mr. Garner received a second letter
via facsimile from OAO, also dated May 25, 1993, which offered
him the position of "transportation consultant" instead of
proposal facilitator. Protest File, Exhibit 51; Transcript at
347. When OAO sent him the second offer letter, OAO advised
Mr. Garner to disregard and destroy the first offer letter.
Transcript at 348. At the hearing, Mr. Garner testified to what
a proposal facilitator was:
The proposal facilitator is what I would call part of
the responsibilities of a transportation consultant as
I understood. It was one piece of the duties as I know
them that would have been what I did working for OAO.
Id. at 124-25. Mr. Garner admitted that "part of what [he] was
[hired to do] was to assist OAO in the FIPs recompete." Id. at
125.
----------- FOOTNOTE BEGINS ---------
[foot #] 11 The offer was sent via facsimile to Mr.
Garner's church. Transcript at 342.
----------- FOOTNOTE ENDS -----------
MTS' President's Visit to Oklahoma City
Mr. Garner met the president of MTS when she came to
Oklahoma City.[foot #] 12 She was interested in
opening an office in Oklahoma City, and Mr. Garner introduced her
to a friend of his who manages an office building. Transcript at
162. She ultimately leased the space through his friend. Id.
Mr. Garner believed that the rental was related to the FIPs
recompetition effort. Id. at 163. Mr. Garner and his wife had
dinner with the president of MTS while she was in Oklahoma City.
Id. at 165, 1935-36.
Mr. Garner's Employment at OAO
Mr. Garner worked for OAO for three and one-half months,
from August 16 through December 1, 1993. Transcript at 14. He
commenced his employment the Monday following his retirement from
the Federal Government. Id. at 15. Mr. Garner's salary at OAO
was per month, or a year. Id. at 190. Mr. Garner
spent his first two weeks on the job for OAO becoming familiar
with OAO's work. Id. at 134. Mr. Garner reported to Mr. Hill.
Id.
Mr. Garner's Third Written Request for an FAA Legal Opinion:
September 8
By memorandum dated September 8, 1993, Mr. Garner advised
FAA counsel that he was currently employed by a firm who would be
bidding on the FIPs contract and that the firm was anticipating
proposing him as the program manager. He continued:
My question is that should we be awarded this contract
do you feel there would be any reason why I could not
serve in this position since I worked [at the Center]
in AMI prior to my retirement?
I would appreciate a letter as to whether your office
feels this would [be] considered a conflict of
interest.
Supplemental Protest File, Exhibit 50. Attached to the
memorandum was a position description stating that the program
manager would be "vested with all the authorities required to be
----------- FOOTNOTE BEGINS ---------
[foot #] 12 The record contains inconsistent testimony as
to when this meeting between Mr. Garner and MTS' president, Ms.
Piper, occurred. Mr. Garner testified that Ms. Piper's visit
occurred within two and one-half months after he began working at
OAO, probably in September 1993. Transcript at 161, 162-65. Ms.
Piper believed the meeting most likely occurred in July 1993,
while Mr. Garner was still employed by FAA. Id. at 1771-76,
___
1983-84.
----------- FOOTNOTE ENDS -----------
fully responsive to [the Center] to successfully execute the
contract." Id., Exhibit 52.
Receipt of this September 8 memorandum was the first that
Mr. Rodriguez became aware of Mr. Garner's employment with a
potential competitor on the FIPs recompetition. Transcript at
494.
Mr. Garner's Trip to Oklahoma on Behalf of OAO
After his first two weeks on the job in Greenbelt, Maryland,
Mr. Garner went back to Oklahoma on behalf of OAO and attempted
to obtain certain federal regulations from FAA. He was told he
could obtain the regulations from the Government Printing Office.
Transcript at 136. Between September 15 and 24, 1993, Mr. Garner
stopped in to see the contracting officer and asked for two
copies of the solicitation. Id. at 938, 1101. The contracting
officer gave him the copies and he left; the meeting lasted for
one to two minutes, and they did not discuss the acquisition.
Id. at 1101, 1106.
After this meeting, the contracting officer learned that
Mr. Garner was working for OAO. Transcript at 1103. This
information, coupled with her knowledge of the procurement
request and attestation, prompted her to write a memorandum
seeking legal advice. Id. at 1100-06, 1651-52, 1657.
The Contracting Officer's September 24 Request for Legal
Advice
Mr. Rodriguez had not yet prepared a response to
Mr. Garner's September 8 memorandum when he received a memorandum
dated September 24, 1993, from the contracting officer.
Transcript at 492-93. In this memorandum, the contracting
officer asked FAA counsel whether "a procurement integrity
violation" existed due to Ruble Garner's employment at OAO and
his status as a procurement official. Supplemental Protest File,
Exhibit 35. She pointed out that he reviewed and signed a
procurement request, and that an attestation indicated that he
was aware he was a procurement official. Id. The contracting
officer believed Mr. Garner was a procurement official at the
time she wrote her September 24 memorandum because the
attestation identified him as a procurement official. Transcript
at 1103-04.
Mr. Rodriguez was assigned to respond to this memorandum.
Transcript at 457. This is the first time that Mr. Rodriguez
became aware that Mr. Garner had initialed the procurement
request. Id. at 461.
The contracting officer never received a response to her
September 24 memorandum. Transcript at 945, 1105.
Mr. Garner's Second Visit to the Contracting Officer
Later during his September 1993 visit to Oklahoma,
Mr. Garner accompanied Georgine Terry to see the contracting
officer, who was also a member of the SEB and Mr. Garner's
neighbor. Transcript at 136-38, 950. Mr. Garner testified that
when he met with the contracting officer in mid-September he was
not privy to whether OAO had decided to compete for the FIPs
recompetition. Id. at 140.[foot #] 13 Mr. Garner and
Ms. Terry's meeting with the contracting officer lasted
approximately fifteen minutes. Id. at 1106. The contracting
officer used this opportunity to seek clarification of a written
question which MTS/OAO had submitted. Id. at 1107.
The contracting officer testified that during this visit by
Mr. Garner, she felt uncomfortable because Mr. Garner was her
neighbor. Transcript at 949-50. The contracting officer
discussed her concern about Mr. Garner being her neighbor with
A. L. Haizlip in the legal department and he advised her orally
that there were no problems.[foot #] 14 Id. at 951;
Supplemental Protest File, Exhibit 36.
The Contracting Officer's Memorandum to the File and
Discussion with Counsel
On October 7, 1993, the contracting officer wrote a
memorandum to the file stating that she met with Mr. Garner and
Ms. Terry on October 1, 1993, and "discussed the acquisition[;]
OAO had submitted a question which I needed clarified." She
continued:
I am uncomfortable with this situation because Ruble
Garner is my neighbor and we have discussed this
acquisition when he was employed by the government and
was a procurement official. These discussions involved
the delegation of procurement authority and were
because his office was the initiator of the requirement
and Cheryl Cooley, the technical co-chairperson, was an
employee of his. I expressed my concern and
uncomfortable feeling to Patty Sparkman, acting
manager, AMQ-500. She suggested that I discuss this
matter with legal.
----------- FOOTNOTE BEGINS ---------
[foot #] 13 After being shown a document, Mr. Garner
changed his testimony to state that he must have known that OAO
intended to bid on the FIPs recompetition by September 8.
Transcript at 180.
[foot #] 14 Mr. Haizlip was lead counsel for FAA in this
protest.
----------- FOOTNOTE ENDS -----------
I discussed the situation with legal counsel who does
not believe an impropriety exists, but has advised me
to document the file.
Supplemental Protest File, Exhibit 36.
Mr. Rodriguez testified that until the hearing in this
protest he was not aware of the fact that the contracting officer
had expressed her discomfort because of Mr. Garner being her
neighbor and the discussions he had with her. Transcript at 499.
Mr. Rodriguez did not know the identity of the FAA counsel with
whom the contracting officer discussed the situation. Id. at
500.
The Red Team
Without having received a response to his September 8
request for legal advice from FAA, Mr. Garner returned to OAO in
Greenbelt, Maryland, on approximately October 3, 1993, and
participated in a red team effort along with other employees of
MTS and OAO. Transcript at 149, 169; Deposition of Phillip Davis
(Davis Deposition) (Dec. 23, 1994) passim.
Mr. Garner spent three days, and no less than twenty-four
hours, on the red team effort. Transcript at 169. The function
of the red team was to review the MTS/OAO
proposal[foot #] 15 and provide comments, feedback,
and direction. Davis Deposition at 15, 32. The red team
consisted of approximately individuals. Transcript
at 171. At one time during the red team effort, Mr. Garner sat
next to the president of MTS. Id. The red team noted comments
on the draft proposal and also filled out forms which contained
space for comments and suggestions. Id. at 17, 34, 1939-40.
Mr. Garner was put on the red team because having come from the
Center, he had the "local color knowledge," and could "make sure
that [MTS/OAO does] not say things that are stupid in our
proposal." Davis Deposition at 381; see also id. at 10;
Transcript at 1934.
Mr. Garner explained his role on the red team:
[W]e came into the room, we were given copies of parts
of the solicitation and sections of the technical
proposal, I think it's called technical proposal, and
my duties was [sic] to read that and see if I
understood what the proposal was saying, and that's
what I did, looking at how it -- how I'd review it if I
was back in Oklahoma City.
----------- FOOTNOTE BEGINS ---------
[foot #] 15 The technical/management volume of MTS'
proposal was a collaborative effort between MTS and OAO. Davis
Deposition at 13.
----------- FOOTNOTE ENDS -----------
Q: Back in Oklahoma City on the source evaluation
board?
A: Or something like that, you know, so it could be
better understood critiquing the wording and the
phraseology and stuff that I would [have]
understood if I was looking at it.
Transcript at 173. Mr. Garner made both oral and written
comments on the draft proposal. Id. at 175-76.
While he was participating in the red team, Mr. Garner
understood that OAO might be proposing him as program manager for
the FIPs recompetition. Transcript at 184-85. However, OAO's
proposal manager had a different understanding -- that OAO
considered proposing Mr. Garner as OAO's site manager for the
contract. Davis Deposition at 22. The site manager would be
OAO's local manager "that has responsibility for the OAO
employees that are on the contract and provide support to MTS'
program manager." Id. at 22. Mr. Garner was considered for that
position because he was "a senior manager, experienced, and knows
the customer certainly." Id. at 23. MTS' president testified
that if Mr. Garner had been proposed for program manager it would
only have been for OAO's effort in the procurement. Transcript
at 1952. MTS had never considered Mr. Garner as a potential
program manager for MTS on this procurement. Id. at 1953.
During Mr. Garner's presence on the red team, there was no
discussion about the cost estimates for the work to be done.
Transcript at 188. Mr. Garner was not involved with the cost
estimate. Id. at 189. Mr. Garner never discussed the estimated
acquisition costs of this procurement with anyone from MTS or
OAO. Id. at 323. MTS' president testified that she knew of no
discussions between OAO and Mr. Garner regarding source selection
sensitive issues or the government estimate. Id. at 1959.
Although OAO's technical/management proposal manager could
not recall the specifics of Mr. Garner's red team comments, he
"was not impressed with them or did not find them to be
particularly insightful." Id. He described Mr. Garner's
participation in the red team as follows:
. . . Mr. Garner's contribution through that process
was minor type of issues, terminology that may have
been used incorrectly, names of things that were
incorrect [or] acronyms. I do not specifically
remember, but it was that level of minutiae, if you
will.
Id. In the view of MTS' president, Mr. Garner's comments "were
not substantial" and had no impact, but "he did make some
recommendations about acronyms." Transcript at 1944. MTS'
president did not recall incorporating any of Mr. Garner's
comments into the proposal. Id. at 1947-48.
The October 5 SEB Minutes
During a meeting of the SEB on October 5, 1993, concerning
the FIPs recompetition, the contracting officer indicated that
she had forwarded a letter to counsel regarding a "possible
procurement integrity violation," and no response had been
received. Protest File, Exhibit 37.
The contracting officer herself prepared the minutes of the
SEB meetings of October 1 and October 5, 1993. Transcript at
954; Protest File, Exhibit 37.
FAA Counsel's Response to Mr. Garner's September 8 Request
for Legal Advice: The October 14 Letter
By letter dated October 14, 1993, FAA counsel responded to
Mr. Garner's request of September 8.[foot #] 16 In
that letter, FAA counsel advised Mr. Garner that his proposed
participation as a project manager on a future contract between
OAO and FAA would constitute a violation of the procurement
integrity regulations. Supplemental Protest File, Exhibit 52.
FAA counsel concluded that the Procurement Integrity Act and
regulations prohibited Mr. Garner from participating in the
procurement on OAO's behalf because he had been a procurement
official on this procurement. Counsel explained:
An agency employee becomes a procurement official if he
or she participates personally and substantially in
drafting a specification developed for the procurement,
or reviews or approves a specification developed for
the procurement. . . . Our review of procurement
documents and available information disclosed that you
have participated as a procurement official in the
procurement for ADP support services. The contracting
officer's file reveals that you executed a Procurement
Official's Certification on or about September 30,
1992. You also reviewed and initialed the Procurement
Request dated July 17, 1992, for the procurement of
these support services.
These actions strongly suggest that you participated
personally and substantially in the review and approval
of the specifications or requirements for the
procurement. This is an activity that the Procurement
Integrity regulations associate with a procurement
official (48 CFR 3.104-4(h)(1)). Your voluntarily
signing the Procurement Official's Certification is
----------- FOOTNOTE BEGINS ---------
[foot #] 16 The letter was signed by Mr. Standell,
Mr. Rodriguez' supervisor, but was drafted by Mr. Rodriguez after
consultation with Mr. Standell. Transcript at 512. The letter
represented both Mr. Standell's and Mr. Rodriguez' opinions. Id.
___
----------- FOOTNOTE ENDS -----------
further acknowledgement of your status as a procurement
official in this matter.
. . . It is our opinion that as a procurement
official, you are prohibited from participating in
contract performance on behalf of OAO, a competing
contractor, or any other contractors submitting an
offer for the ADP support services. The prohibition
applies for a 2 year period, extending from the date of
your last personal and substantial participation in the
procurement process. This ban applies to your proposed
position as Program Manager, as well as to any other
form of participation on behalf of OAO. . . .
Accordingly, we suggest that you decline the offer to
perform contract services on behalf of OAO or any other
competing contractor for this procurement.
Id. The contracting officer was not informed of this opinion
until this protest. Transcript at 946.
Mr. Garner's Discovery of the Attestation of Procurement
Integrity
Mr. Garner testified that the first time he saw the
attestation was in the middle of October 1993 when OAO asked FAA
counsel for a ruling on using him in the performance of this
contract and FAA counsel produced a redacted version of the
attestation. Transcript at 79.[foot #] 17
OAO's Reaction to FAA's October 14 Legal Opinion
As a result of the FAA's October 14, 1993, opinion letter,
OAO decided not to propose Mr. Garner as site manager, and OAO's
proposal manager distanced himself and the proposal activity from
Mr. Garner. Davis Deposition at 24.
OAO Counsel's Request for Reconsideration
By letter dated October 27, 1993, OAO's counsel formally
requested reconsideration of the FAA's determination that
Mr. Garner's participation as a program manager would violate the
procurement integrity regulations. Supplemental Protest File,
Exhibit 54.
----------- FOOTNOTE BEGINS ---------
[foot #] 17 Mr. Garner testified that as best he could
recall he was a procurement official on three occasions, not
including this one -- the original KenRob contract, another
procurement for which he was on the SEB, the OATS contract, and
the renegotiation of the KenRob contract. Transcript at 80.
----------- FOOTNOTE ENDS -----------
FAA's Denial of Reconsideration
By letter dated November 3, 1993, FAA counsel denied the
request for reconsideration, stating:
There is some merit to your argument that the
appearance of Mr. Garner's name in the 'Attestation . .
.' does not directly establish his status as a
procurement official.[[foot #] 18] However,
we are convinced that Mr. Garner's initials on the
Procurement Request reflects (sic) his personal and
substantial participation in the procurement process,
as defined by the regulations . . . . His review and
approval of the Procurement Request amounts to a
participation in its preparation, since, without his
participation, the document would not have been
approved or sent forward for final signature by
Mr. Garner's former supervisor . . . .
Supplemental Protest File, Exhibit 56. OAO and Mr. Garner agreed
that Mr. Garner would cease his employment with OAO as of
December 1, 1993. That agreement was fulfilled. Transcript at
14; see, Davis Deposition at 58.
The Re-emergence of the Procurement Integrity Issue in
March 1994
The issue of whether Mr. Garner was a procurement official
was raised again in March 1994, when the certifications and
representations submitted by OAO in MTS' BAFO indicated that OAO
had employed Mr. Garner. Transcript at 114, 522; Supplemental
Protest File, Exhibit 38.
The minutes of an SEB meeting on the FIPs procurement on
March 3, 1994, reflect that the SEB discussed the procurement
integrity issue regarding OAO:
[MTS'] subcontractor (OAO) indicated a possible
violation in their representations and certifications.
Specifically, they indicated that they have employed
Ruble Garner (a former FAA employee) and that
Mr. Garner assisted them in the preparation of their
subcontract proposal. They further indicated that FAA
has rendered an opinion that Mr. Garner cannot be
proposed as key personnel and he has not been so. They
further stated that Mr. Garner's limited participation
in the preparation in the subcontract proposal complies
----------- FOOTNOTE BEGINS ---------
[foot #] 18 A few days before testifying at the hearing,
Mr. Rodriguez was told by the contracting officer that the
procurement integrity attestation was inaccurate in that
Mr. Garner had not been informed that he was a procurement
official as reflected on the attestation. Transcript at 622.
----------- FOOTNOTE ENDS -----------
with and is authorized by the Procurement Integrity
Act. . . . Mr. Garner no longer works for OAO. [The
CO] asked Ms. Douglas to discuss the situation with
[counsel] and to provide the SEB with a determination.
Supplemental Protest File, Exhibit 38 at 2.
On March 24, the counsel identified in the minutes,
Ms. Douglas, approached Mr. Rodriguez with this issue.
Transcript at 533. Mr. Rodriguez in turn discussed the issue of
Mr. Garner with Mr. Haizlip, FAA's counsel in this protest, in
generic terms, without mentioning any proper names, names of
parties, or descriptions of procurement. Id. at 534. Contacts
were then made with the three other attorneys and "based on those
conversations [Mr. Rodriguez concluded] that the matter of
Mr. Garner's participation by way of his concurrence on a
procurement request was not a substantive participation in a
procurement action." Id. at 538. The generic request forwarded
to these individuals questioned whether a former FAA employee's
initialing of a procurement request was a personal and
substantial participation in a procurement action. Id. at 552.
No other facts were included in the generic scenario. Id. at
623. The generic scenario was never reduced to writing. Id. at
540. FAA counsel did not interview Mr. Garner. Id. at 557.
One of the three individuals FAA counsel intended to contact
was the FAA senior ethics official, John Walsh, in Washington,
DC, to obtain his opinion regarding Mr. Garner. Prior to
contacting Mr. Walsh, Mr. Rodriguez drafted a memorandum in
anticipation of what Mr. Walsh's opinion would be. Respondent's
Exhibit 32; Transcript at 565. That draft memorandum purported
to respond to counsel's request for comments regarding a
"procurement integrity question regarding assistance on
development of subcontractor's proposal." Respondent's
Exhibit 32. The memorandum concluded:
Based on our review of the procurement integrity
legislation . . . and the resultant procurement
regulation . . . we can find no authority that
specifically prohibits such conduct. I, along with A.
L. Haizlip of this office, discussed this matter with
John Walsh, the senior attorney for ethics of the FAA
chief counsel's office. Mr. Haizlip forwarded an E-
mail message to Mr. Walsh, which outlined your scenario
(without using specific identities; copies
attached).[[foot #] 19] Mr. Walsh had
reviewed similar procurement situations in the past.
On March 25, 1994, Mr. Walsh commented that he could
find no authority which directly prohibits a
procurement official from assisting a competing
contractor (or a subcontractor thereof) in the
----------- FOOTNOTE BEGINS ---------
[foot #] 19 This E-mail message no longer exists.
----------- FOOTNOTE ENDS -----------
development of a proposal for the procurement on which
that person had personally and substantially
participated. . . .
Based on the foregoing, there appears to be no defect
in the proposal's procurement integrity certificate
requiring rejection or amendment.
Id. Because Mr. Walsh's advice was inconclusive, however, that
memorandum was never sent. Transcript at 565-66.
The two FAA counsel, Messrs. Haizlip and Rodriguez, had a
five- to ten-minute telephonic conversation with Mr. Walsh.
Transcript at 568. Mr. Walsh recalled telling Mr. Haizlip "that
I didn't have time to sort through that problem and give him my
advice. And he accepted that graciously." Deposition of John T.
Walsh (Walsh Deposition) (Jan. 31, 1995) at 24.
Messrs. Haizlip and Rodriguez then contacted another
attorney, Mr. Salgado, in the FAA chief counsel's office in
Washington, DC; he stated that the initialing of a procurement
request by an official was routine, perfunctory participation
rather than substantial. Transcript at 600. The third attorney
contacted, Professor Hagberg, also believed initialing a
procurement request was routine and perfunctory and not personal
and substantial participation. Id. at 601.
Based upon these contacts and his own review of the FAR,
Mr. Rodriguez changed his decision and concluded that Mr. Garner
did not have personal and substantial involvement in the
procurement. He realized that he had issued two contrary
opinions, but reexamined the matter because it was a very close
question and something with which he had struggled. Transcript
at 547-48.
No independent investigation as to whether a possible
procurement integrity violation had occurred was undertaken
either by FAA counsel or the contracting officer. Transcript at
557, 958-59. Neither Mr. Haizlip nor Mr. Rodriguez is
responsible for implementing the provisions of FAR 3.104-11 or
investigating procurement integrity violations. Protester's
Hearing Exhibits 27, 28; Transcript at 555.
The March 1994 Revised Legal Opinion
FAA counsel answered orally and in generic fashion the
contracting officer's request about the possible procurement
integrity violation in OAO's certification. Transcript at 609.
In a memorandum to the file dated March 28, 1994, the
contracting officer stated:
A. L. Haizlip, AMC-7, contacted me and advised that a
procurement integrity issue did not exist regarding
[MTS'] subcontractor's notice in section K of the
solicitation of a possible violation. Mr. Garner was
not considered to be a procurement official on this
acquisition because he had not 'participated personally
and substantially.' An agency opinion regarding this
situation had been received from AGC-110. Mr. Haizlip
advised that he would send something in writing.
Supplement Protest File, Exhibit 39. AGC-110 referred to FAA's
ethics office in Washington, DC, i.e., Mr. Walsh's office.
Transcript at 1029-30.
During her deposition, the contracting officer testified as
follows regarding her conclusion that Mr. Garner was not a
procurement official:
Q The next sentence reads that Mr. Garner was not
considered to be a procurement official on this
acquisition because he had not participated
personally and substantially. What is the basis
for making that sentence?
A That was information provided to me by
Mr. Haizlip.
Q So that was not your conclusion?
A No.
Transcript at 1157. The contracting officer further testified
that she agreed with counsel's conclusions. Id. at 1158.
The Source Selection Official was not Informed of the
Procurement Integrity Issue
The SSO was the Center director and the Head of Contracting
Authority (HCA). At the time the SSO made his decision to award
the contract to MTS, he was not informed of any concern relative
to the procurement integrity statute. Transcript at 529, 559,
644-45, 1680. The SSO testified that if the contracting officer,
with input from the Center's legal department, had determined
that a possible violation of procurement integrity existed he
would have expected her to advise him of that; he depended upon
his contracting officers and legal department to determine which
allegations were serious enough to bring to his attention. Id.
at 801, 804.
The contracting officer admitted that she did not inform the
HCA of the possible procurement integrity violation or conclude
whether that possible violation had any impact on the procurement
as required by FAR 3.104-11. Transcript at 963-64. At the
hearing she claimed she did not do so because the matter was only
a "concern" which did not rise to the level of a possible
violation. Id. at 964, 1125. However, the contracting officer
had in her written memorandum and SEB minutes characterized the
procurement integrity issue as a "possible violation." Id. at
940-41.
The contracting officer testified in response to a question
by MTS' counsel as follows:
Q How would a concern become a violation or a
potential violation?
A I just followed -- I would not have -- to me there
is a concern but to determine whether it is a
possible violation or a violation, I would not
want to report that until I was sure that it had
reached that stage. That -- there is a
distinction to me, and until I was sure whether it
had reached that, to me, it was a concern because
we never knew whether there was a violation or
possible violation.
Q Well, how would it ever reach that level?
A Information provided, a determination.
Q What kind of information?
A If it had been determined that he was a
procurement official.
Q What would that depend on?
A That would depend on investigations to see his
participation in this procurement.
Id. at 1126[foot #] 20; see id. at 941-42. She
further stated that the concern was resolved in her mind when she
had the discussion with counsel on March 28, 1994. Id.
The Freedom of Information Act (FOIA) Request
In response to a FOIA request, FAA released all of KenRob's
hourly composite rates through January 18, 1993, to some offerors
in the recompetition. Respondent's Exhibit 39; Transcript at
1133. Also included were representative task orders issued under
----------- FOOTNOTE BEGINS ---------
[foot #] 20 The Board finds this testimony not to be
credible. On prior occasions the contracting officer in writing
characterized Mr. Garner's involvement as a possible violation --
her September 24 memorandum, the October 5, 1993, SEB minutes,
("a possible procurement integrity violation"), the March 3,
1994, SEB minutes ("OAO indicated a possible violation in their
representations and certifications"). Supplemental Protest File,
Exhibits 35, 37, 38; see also Transcript at 1667-69.
________
----------- FOOTNOTE ENDS -----------
KenRob's contract. Id. The task orders reflected unit prices
for different skill categories. Id. OAO had filed a FOIA
request for a copy of the KenRob contract, all the amendments,
and the "sell rates for all the skill levels." Transcript at
1134-35; MTS Hearing Exhibit 9. Management Assistance
Corporation of America (MACA) and Anstec, other offerors in this
procurement, and MTS also received copies of the KenRob contract.
Transcript at 1129-36, 1928-29.
Facts Relating to the Evaluation and Award
The Solicitation
On March 31, 1993, FAA issued solicitation number
DTFA-01-92-R-00908, seeking proposals for FIPs services for the
Center. The procurement was to be a small, minority-owned
business set-aside competition under the Small Business
Administration's 8(a) program. Protest File, Exhibit 1 at 66,
98. The procurement sought a follow-on contract to the Center's
existing contract with KenRob for FIPs services after the
incumbent contract expired. Id., Exhibit 28 at 6.
On August 19, 1993, FAA canceled the solicitation because it
had not obtained a DPA. On September 15, 1993, after the FAA
obtained a DPA, the solicitation was reissued as solicitation
number DTFA-02-93-R-00905. Protest File, Exhibit 6 at 7.
The solicitation requires the contractor to provide FIPs
support services described in the PWS attached to the RFP.
Protest File, Exhibit 6 at 23, 77-113. Section B of the RFP
contains a list of twenty-seven personnel skill categories, along
with the FAA's estimated annual hourly requirements for each
category. Id. at 13-14. The skill categories encompass
occupations requiring automatic data processing type skills,
including programmers, systems analysts, telecommunications
specialists, computer operators, and librarians. Id.
The offerors were required to propose, for the contract's
base year and the four option years, fixed hourly composite rates
for each of the twenty-seven categories listed. The aggregate
total price of the fixed hourly rates for the twenty-seven
categories multiplied by the RFP's estimated annual hours, for
each of the five contract years, represented each offeror's
proposed price. Protest File, Exhibit 6 at 13-22.
Section F.3 of the RFP states that the FIPs contract
includes a forty-five day transition period, but allows the FAA
to alter the time frame for transition. Protest File, Exhibit 6
at 24. The solicitation contained the requirement for a
certificate of procurement integrity. Id., Exhibit 6 at 36-37,
52-53.
Section L of the RFP required the offerors to submit
separate technical and cost proposals. Protest File, Exhibit 6
at 63. The cost volume was to include an executed Standard
Form 1411, "Contract Pricing Proposal Cover Sheet," for each
contract year, along with supporting cost/pricing data for all
proposed line item prices. In addition, offerors were required
to provide cost element breakdowns for the labor hour contract
line items. Id. at 67.
Section L.4 of the RFP provided in pertinent part:
"Offerors are instructed to prepare pricing proposals in
sufficient detail to permit a thorough and complete evaluation by
the Government." Protest File, Exhibit 6 at 67.
Paragraph L.4(b) included the following requirement for
price/cost proposals:
Offerors shall submit company financial statements for
the two previous fiscal years. Audited statements
shall be submitted if available. Financial statements
shall include balance sheets and income statements.
Protest File, Exhibit 6 at 67.
Section M, Paragraph M.1, Introduction, provided in
pertinent part:
(b) Each proposal will be evaluated on the basis
of its technical and price/cost proposal, technical
being slightly more important than price/cost.
. . . .
(d) Technical proposals will be evaluated, rated,
and scored in accordance with a pre-established
evaluation plan. The categories of evaluation are
listed in Provision M.2 in descending order of
importance. Likewise, the major factors identified
within each category are listed in descending order of
importance.
(e) Price/cost proposals will not be rated or
scored but evaluated on the basis of completeness,
reasonableness, and realism.
(f) The offer that provides the overall greatest
value to the Government will be selected. Therefore,
the successful offer may not necessarily be the lowest
priced offer. Technical competency is slightly more
important than price. However, price may become
relatively more important as the difference in
technical scores decreases.
. . . .
(h) The Government reserves the right to award a
contract based on initial offers received, without
discussions or negotiations.
Protest File, Exhibit 6 at 71.
Paragraph M.2, Technical Evaluation, provided:
(a) Selection of a contractor for award will be
based on evaluation of technical proposals according to
the following six categories which are listed in
descending order of importance:
(1) Experience and Past Performance
(2) Program Management
(3) Staffing
(4) Understanding the Requirement
(5) Transition Plan
(6) Risk to the Government
(b) Category 1 is slightly more important than
Category 2 and Category 2 is slightly more important
than Category 3. Category 3 is approximately twice as
important as Category 4 which is approximately twice as
important as Category 5. Category 5 is approximately
twice as important as Category 6. Major factors within
each category will be rated by the evaluation team on a
rating scale as follows: 4 = Excellent; 3 = Good;
2 = Satisfactory; 1 = Fair; and 0 = Unsatisfactory.
Team ratings for each major factor will be weighted to
establish a score for each category. . . . The
technical proposal will be evaluated as a whole
document. Therefore, information among the major
factors that is relevant may be considered by the
evaluation team.
Protest File, Exhibit 6 at 72.
Category 6, risk to the Government, stated:
The FAA will evaluate each technical proposal based
upon perceived risks to the government inherent in
award to each offeror. Areas evaluated will include,
but not be limited to, technical competence, program
management, understanding of the FAA requirements, and
the presence of a sound plan to ensure continuity of
operations and quality performance.
Protest File, Exhibit 6 at 67.
Paragraph M.3 provided that price/cost proposals would be
evaluated but not numerically scored in the following areas:
Completeness - Review of the proposal to ensure
data provided is sufficient to allow complete analysis
and evaluation of proposed costs and includes all
information required by L.4.
Reasonableness - Review of rationale and data
supporting elements of cost included in the proposal.
Realism - Overall review of proposal cost elements
and estimating methodologies employed to determine
whether the resulting prices are realistic based on the
performance described.
Protest File, Exhibit 6 at 74.
The Technical Evaluation Plan
The technical evaluation plan described the possible
technical ratings as:
Protest File, Exhibit 7 at 4. The technical evaluation plan was
not revealed to offerors. Transcript at 1435.
The contracting officer acknowledged that with respect to a
satisfactory rating of 2.0, weaknesses could be present.
Transcript at 1161. The technical evaluation plan addressed
"discussions" and stated:
If it is determined that discussions are necessary
prior to award, such discussions will be held with all
offerors within the competitive range based on
weaknesses and deficiencies reported to the SEB and/or
the Contracting Officer.
Protest File, Exhibit 7 at 3 (emphasis added).
The technical evaluation plan did not instruct evaluators
that in performing the final evaluation they were not to evaluate
any information that was previously rated "2" or higher. Protest
File, Exhibit 7. Rather, the plan stated:
Upon receipt of best and final offers, the TET will
conduct final evaluations of each proposal. All
supplemental information or revised proposals shall be
analyzed taking into account any impact on other
aspects of the proposal.
Protest File, Exhibit 7.
The Evaluation and Award Process
Proposals were submitted on November 23, 1993. Transcript
at 1937. The FAA's Technical Evaluation Team (TET) evaluated
technical proposals, and the Price Evaluation Team (PET)
evaluated cost proposals. Protest File, Exhibit 28. In its
evaluation of each offeror's personnel compensation, the TET
Transcript at 1463, 1465. The TET
did not consider that Caelum's rates were lower in certain
categories than the incumbent's rates. Id. at 1393.
After evaluation of initial proposals, five offerors were
determined to be in the competitive range. Protest File,
Exhibit 17. The technical scores and prices, after evaluation of
initial proposals, for the five offerors in the competitive range
were as follows:
Offeror Technical Score Price
Caelum
MACA
Anstec
PDS
Protest File, Exhibit 28 at 10.
Discussions
The Center had a policy of not conducting discussions in any
procurement with any offeror regarding a technical subfactor for
which the offeror had received a "2" or better. Transcript at
991, 995. This was also the contracting officer's policy. Id.
In her fourteen years as a contracting officer, the contracting
officer never held technical discussions with any offeror in any
technical subfactor which was rated a "2" or better. Id. at
996-97. This Center policy was unwritten as far as the
contracting officer knew. Id. at 992, 995. Following this
policy, the contracting officer only held discussions if there
were weaknesses or deficiencies reflected in a score of less than
"2," "bar nothing." Id. at 994.
By letter dated May 6, 1994, FAA advised Caelum it was in
the competitive range and that oral discussions would be held.
Protest File, Exhibit 20. The letter further stated:
Negotiations are being conducted to seek clarifications
and to discuss the following weaknesses, and any other
items that may arise:
1. Solicitation Issues:
a. Since pages 2 through 11 were retyped,
confirmation is required that no exceptions were taken
to the solicitation.
b. Section K, Representations,
Certifications, and Other Statements of Offerors,
Clauses 52.222-22, Previous Contracts and Compliance
Reports and 52.222-25, Affirmative Action Compliance.
A negative response was made to these clauses. These
clauses are applicable to prime and subcontractors with
50 or more employees and a contract or subcontract of
$50,000 or more. The required compliance reports and
written affirmative action program must be developed
within 120 days from contract award.
Id. The only other issues in the letter were related to
cost/price. Id.
MTS received a similar letter; the only technical issues
mentioned were:
1. Solicitation Issues:
a. On Page 1a, the section entitled
Subcontractor needs to be completed, i.e., signature,
date, name and title.
b. Since pages 2 through 11 were retyped,
confirmation is required that no exceptions were taken
to the solicitation.
Protest File, Exhibit 20.
Id. However, MTS was
advised that its financial statements were not certified and that
OAO had submitted financial statements for 1990 and 1991, instead
of for 1992 and 1993. Id.
In May 1994, after the evaluation of initial proposals, the
FAA held discussions with the five offerors in the competitive
range. Protest File, Exhibits 20, 21. Discussions regarding
each offeror's technical proposal were limited to those factors
which had been evaluated as less than "satisfactory," i.e.,
receiving a score of less than "2." Transcript at 991-97, 1142,
1143. This decision was based upon the longstanding Center
policy which had been applied to all negotiated procurements the
contracting officer ran. Id.
No technical discussions were held with Caelum or MTS
because they had received a "2" or higher in all technical
subfactors. Transcript at 1003, 1425-26. One member of the TET
testified that Caelum had weaknesses and deficiencies, but that
none of them were significant. Id. at 1438. Technical
discussions were held with Anstec and PDS. Protest File,
Exhibits 20, 24.
During discussions, the contracting officer informed
offerors that at BAFO FAA would only evaluate factors in the
technical proposals that had been rated less than "2" or that had
significant weaknesses or deficiencies. Transcript at 1432-33,
1436-37.
Caelum did not protest this procedure for evaluating BAFO
proposals. Transcript at 1148, 1441-42.
The Request for BAFOs
By letter dated July 27, 1994, FAA issued amendment three to
the solicitation and requested BAFOs for all offerors in the
competitive range. The letter stated:
Any revisions, clarifications, amplifications, or
additional information that you believe to be necessary
or that may have been noted during
discussions/negotiations must be provided in the form
of replacement pages for Volumes I and II.
Protest File, Exhibit 22. The letter further specified that "any
major revisions or major redirection of effort constituting a
rewrite of the proposals will not be accepted." Id.
Evaluation of BAFOs
The TET, following instructions by the SEB and the
contracting officer, did not evaluate any technical information
in BAFOs if it dealt with a technical subfactor that had received
a score of a "2" or higher. Transcript at 997, 1003, 1376-77,
1427, 1460-61; Supplemental Protest File, Exhibit 44.
Because neither MTS' nor Caelum's initial technical proposal
included any areas scored below "3," the TET did not reevaluate
either offeror's technical BAFO. Therefore, the scores MTS and
Caelum received on their BAFO technical proposals remained the
same as the scores on their initial proposals. Protest File,
Exhibits 15, 24; Transcript at 1389-90, 1425-26, 1459.
The Cost Evaluation
In its BAFO, Caelum included a letter dated July 2, 1994,
from Patriot National Bank, committing to provide Caelum some
in working capital. Protest File, Exhibit 11 at 693-97.
The PET reviewed cost and pricing data for completeness,
consistency, and accuracy. It also analyzed the proposed labor
overhead rate for realism and consistency with related proposed
cost elements (i.e., compensation bonuses and awards, fringe
benefits, taxes, training costs, and site costs) and analyzed the
proposed G&A rate (i.e., corporate overhead) for realism and the
proposed overtime practices for consistency with related proposed
costs, any uncompensated overtime, and an assessment of resulting
labor rate dilution. Transcript at 1231-32, 1306-08, 1331-38;
Protest File, Exhibits 16, 25. The cost realism analysis
consisted of a
Id. at 1231-32.
Id. at 1233.
Id. at 1232.
The PET concluded that, based on its cost realism analysis
of cost proposals in the competitive range, each offeror's price
was complete, reasonable, and realistic. Protester's Exhibit 25.
The PET chairman testified that the reasonableness of the
offerors' prices was established by the substantial price
competition in this procurement. Transcript at 1338-39.
Id. at 1354.
Based on its analysis of cost proposals, the PET had "an
average level of confidence regarding the cost and pricing data"
in the Caelum/KenRob proposal. The PET had "an average to above
average level of confidence regarding the cost and pricing data"
in the MTS/OAO cost proposal. Protest File, Exhibit 28;
Transcript at 1264.
According to MTS' expert witness, there were adequate costs
in both the MTS and Caelum cost proposals to deliver the services
described in the technical proposals, by focusing on employee
compensation and its impact on employee recruitment and
retention. Transcript at 1888.
The cost team examined whether the contractors were
financially capable of meeting the working capital requirements
of the contract. Transcript at 1311. In other words, did they
have enough payroll flow to meet the payroll needs until the case
flow from the contract would start up? Id. The overriding
consideration
Id. at 1320.
The Draft SEB Report
On September 18, 1994, the SEB prepared an initial draft of
the SEB final report. Under the section entitled Significant
Discriminators Among Proposals, it stated that Caelum's salary
range was the most competitive of all the offerors. Protester's
Hearing Exhibit 16.
Id.
Both the draft SEB report and the final SEB report contained
the following description of Caelum's financial condition under
the cost evaluation:
[Caelum's] financial condition is
per Dun and Bradstreet. The unaudited financial
statements submitted reflected a net worth of
for the period ending March 31, 1994. However, Caelum
provided a copy of a letter of commitment from a bank
in Reston, Virginia referencing a working capital of
In addition, Caelum provided a copy of a
promissory note from a different bank in the amount of
but it was not signed by the lender and it did
not reference any working capital for this contract.
Their subcontractor's, KENROB, financial condition was
rated as by Dun and Bradstreet in August 1994,
with an audited net worth of as of
December 31, 1992.
Protest File, Exhibits 16, 28.
The draft SEB report of September 28, 1994, in the cost
section, stated that
Protester's Hearing
Exhibit 16; Transcript at 1042.
The SSO did not see the SEB's draft report. Transcript at
693.
The Request for Post-BAFO Information from MTS
The cost team
Transcript at 1241-42.
In a memorandum to the file dated October 4, 1994, the
contracting officer stated:
Re: Determination of Responsibility/Eligibility
I contacted Mr. Roy Jenkins, SBA . . . regarding
FAR 19.809, Preaward considerations. . . . I explained
a possible situation; e.g., if a firm was determined
financially incapable of performing when would this be
referred to SBA, before a selection has been made by
the SSO or after a selection has been made by the SSO.
Second, I asked whether financial capability was a part
of SBA's determination of eligibility.
Mr. Jenkins advised that any negative preaward findings
should be referred to SBA after a selection is made by
the SSO. Second, Mr. Jenkins explained that SBA does
not look at financial capability or any other element
of responsibility when determining eligibility. . . .
Mr. Jenkins further advised that a determination of
eligibility is to be made within 5 working days which
is not sufficient time for a determination of
responsibility to be made.
Protest File, Exhibit 26.
By letter dated October 5, 1994, the contracting officer
advised MTS as follows:
Protest File, Exhibit 26 at 12. MTS is the only offeror to which
such a letter was sent. Id.
By letter dated October 13, 1994, MTS responded to the
contracting officer's letter, stating in pertinent part:
Protest File, Exhibit 26 at 1.
The letter of commitment addressed to the contracting
officer and dated October 7, 1994, stated in pertinent part:
In the event that MTS is awarded the above contract,
will, upon assignment of all claims or monies due or to
become due under this contract, advance to MTS working
capital not to exceed of all outstanding
receivables
for use in
the performance of said contract. In addition, to
ensure that MTS has sufficient funds to transition and
start-up the contract,
It is understood that the government will rely upon
this commitment in making an award of the above
contract to MTS.
Protest File, Exhibit 26 at 3. The June 30, 1994, statement from
MTS' accountants stated that the report was a compilation and
that the accountants had not audited or reviewed the accompanying
statement. Id. at 6. The contracting officer transmitted MTS'
response to the PET, and the team revised its pricing evaluation
report to include the information. Transcript at 1039.
The Final SEB Report
The final scoring and prices after BAFOs were:
Tech Tech 5-Year Estimated Price
Offeror Score Rank Price Rank
A (Caelum)
B (MTS)
C (Anstec)
D (MACA)
E (PDS)
Protest File, Exhibit 28 at 23.
The SEB final report was inaccurate with respect to the
number of
Transcript at 1284.
Id.
Id. at
1281-83.
The SEB final report contained changes based on the
supplemental post-BAFO information submitted by MTS. Protest
File, Exhibit 28 at 26. Specifically, the report stated that MTS
in its latest audited financial statement reflected a net worth
of and that MTS "provided a letter of commitment from a
financial institution reflecting working capital of approximately
a year." Id.; Transcript at 1268. The SEB final
report erroneously characterized MTS' financial statement as
"audited," when the statements were compilations. Protest File,
Exhibit 28; Transcript at 1044.
The final SEB report deleted the
which had been in the draft report that Caelum's was
the The final SEB report also deleted the
significant discriminator
Transcript at 696, 1637; Protester's Hearing
Exhibit 16; Protest File, Exhibit 28.
The contracting officer testified that there were changes to
the draft SEB report because the SEB examined the Transportation
Acquisition Manual (TAM) and compared what should have been in
the SEB report according to the TAM with what they had actually
included. Transcript at 1138-39. The SEB concluded that they
had put information in certain sections that should not have been
there, or should have been in other sections. Id. at 1139.
The October 31, 1994, Briefing
The SSO received the final SEB report with attachments, and
he reviewed that report in preparation for the SEB briefing.
Transcript at 649. On October 31, 1994, the SEB attempted to
brief the SSO. Id. Before the SSO was able to ask any questions
at the briefing, he was called out of the room. Id. at 681. He
received a telephone call from either the administrator or the
executive director of the FAA. Id. at 681-82. When the SSO
returned from taking the telephone call, he asked: "Is there any
reason that I should not select MTS?" Id. at 682. No reason was
identified. Id. The SSO said he saw no need for the briefing.
Id. at 682-83.
In his comparison of the proposal prices in the competitive
range, the SSO determined that Anstec's price was unrealistic,
while MTS' and Caelum's proposals were priced realistically.
Transcript at 710, 772, 774, 777-78, 879-80. The SSO did not use
the government estimate to evaluate whether the offerors' prices
were realistic. Id. at 783. Rather, he performed his own
statistical analysis. Id. at 710, 772, 774, 777-80. After
reviewing the SEB's final report, the SSO narrowed the candidates
for contract award to the three highest-ranked technical
proposals -- Caelum, MTS, and Anstec. Id. at 771.
The SSO viewed the cost proposals of MTS and Caelum to be
essentially identical in terms of the cost data. Transcript at
778-79, 1879. Because of this, the cost evaluations were not a
significant factor in his decision to select MTS. Id. The SSO
testified that the difference between
on one hand and on the other hand,
which were more than 10% below the market rate, was not
significant in his decision as between Caelum and MTS. Id. at
831-32.
Id. at 696. The SSO testified that it did not matter to him that
MTS' financials were unaudited,
Id. at 782.
The SSO compared the
Transcript at 726-27, 778. The SSO considered the
offered by Caelum to be extremely small because the
evaluation and scoring of proposals was
Id. at 774-76, 789.
The SSO explained why he concluded that the MTS proposal
offered the greatest value:
The difference in
there is a difference.
I looked at that in terms of of added
value, and I asked myself, given all of the other facts
that were in the reports -- the ability to hire people,
the ability to transition people over, and knowing full
well that either company that I selected would use and
get the same people -- I determined it was not in the
taxpayer's best interest to spend more.
It's as simple as that.
Transcript at 885.
Intervenor's Expert's Analysis
MTS' expert witness testified that for both MTS and Caelum
the proposed price is the best estimate of the ultimate cost to
the Government, and therefore, MTS' price advantage over Caelum
represents a real savings of over the five-year life
of the contract. Transcript at 1887-88. The expert further
opined that because MTS proposed to pay of the direct
compensation paid employees under the incumbent contract, and
Caelum proposed to pay of the direct compensation paid
under the incumbent contract, both offerors could effectively
retain the existing work force at their proposed direct labor
rates. Id. at 1891-92.
According to MTS' expert, the government cost estimate for
the FIPs procurement was of little competitive value because it
was based on the labor rates of the sole source incumbent
contractor (KenRob) which were higher than those expected in this
competitive procurement, and it was easy for the offerors to
calculate an approximation of the government cost estimate using
information regarding the incumbent contract publicly available
under FOIA. Transcript at 1912, 1916-17, 1924.
Discussion
Is Caelum's Protest Timely?
MTS has moved to dismiss Caelum's December 30 protest and
portions of its January 6 supplemental protest as
untimely.[foot #] 21 In both motions, MTS seeks to
dismiss all allegations of violation of the Procurement Integrity
Act except for the contention that FAA failed to investigate a
possible integrity violation in contravention of FAR 3.104-11
(1989).
MTS claims that Caelum knew or should have known the basis
for its procurement integrity allegation no later than
November 30, 1994, more than four weeks prior to the filing of
the December 30 protest. MTS cites the fact that Caelum's
----------- FOOTNOTE BEGINS ---------
[foot #] 21 FAA in its posthearing brief also contends
Caelum's protest is untimely.
----------- FOOTNOTE ENDS -----------
president was advised in a telephonic conversation by employees
of Anstec and MACA that a former FAA employee had participated in
the acquisition for FAA and then assisted MTS/OAO in their
proposal. MTS further cites the redacted version of the Anstec
protest complaint which was provided to Caelum.
Caelum responds by stating that it could not know the
validity or accuracy of the hearsay in the telephonic
conversation or of Anstec's factual allegations. Due to the
potentially serious nature of those allegations, it deferred
filing a protest rather than rely on inconclusive, hearsay
information. Caelum filed its protest within ten working days of
its review of the protest file, when it first independently
learned of a factual basis for these allegations.
We agree with Caelum that its allegations are timely. Our
rules do not require that a vendor file a protest alleging a
procurement integrity allegation simply because its competitor
did. While we have held that vendors will be charged with
knowledge of facts which they should have known, it would not be
appropriate for us to charge vendors with a sufficient basis for
filing a protest based only upon rumor. As we recognized in
United Telephone Co. of the Northwest, GSBCA 10031-P, 89-3 BCA
21,944, at 110,367, 1989 BPD 151, at 3, such rumor and
innuendo "would be a flimsy reed indeed on which to base a
lawsuit."[foot #] 22
Counsel has an obligation to ensure that allegations of a
serious nature such as alleged procurement integrity violations
-- which carry criminal penalties in other fora and could
adversely affect an individual's reputation -- are based on fact
rather than suspicion, innuendo, or hearsay. We would be sending
the wrong message if we were to require protesters to parrot
allegations raised by other parties without knowing the
facts.[foot #] 23
----------- FOOTNOTE BEGINS ---------
[foot #] 22 Although the Board's merits decision in
United Telephone was vacated for lack of jurisdiction, US West
________________ ________
Communications v. United States, 940 F.2d 622 (Fed. Cir. 1991),
_______________________________
we deem the rationale on this point in the above-cited decision
to be persuasive.
[foot #] 23 The same analysis applies to MTS' contention
that Caelum's organizational conflict of interest allegation is
untimely. MTS contends that this "new" protest ground is based
upon the same factual allegations that formed the basis for the
alleged violation of the Procurement Integrity Act. For the same
reason that we have found the Procurement Integrity Act
allegations to have been timely filed within ten working days
following counsel's review of the protest file, this allegation
is also timely.
----------- FOOTNOTE ENDS -----------
There is another ground here for concluding that this
allegation is timely. As we ruled in our decision dismissing
Anstec's protest with prejudice, Caelum's and PDS' timely
interventions survived as viable protests. Anstec, Inc. v.
Department of Transportation, GSBCA 13087-P, et al. 1995 BPD 15
(Jan. 13, 1995). The grounds in Anstec's protest applicable to
Caelum may be pursued by Caelum in this protest. Atlis Federal
Services, Inc. v. Department of Health and Human Services,
GSBCA 12959-P, 1994 BPD 235 (Nov. 15, 1994). While MTS also
sought to dismiss Anstec's protest (and hence the surviving
Caelum/PDS protests) as untimely, that motion fails. MTS claimed
Anstec should have filed its protest within ten working days of
learning of Mr. Garner's activities -- before any award was made.
While Anstec could have raised such an allegation pre-award, it
was not required to do so. Anstec did not know the alleged
Procurement Integrity Act violation would have any impact on this
procurement until award was made to MTS/OAO. Further, allowing
offerors to wait until after award to raise this type of a
Procurement Integrity Act allegation would have the salutary
effect of permitting the agency to conduct an investigation
pursuant to FAR 3.104-11. Thus, since Anstec's protest timely
raised a Procurement Integrity Act allegation, Caelum may pursue
that allegation because Caelum's intervention in Anstec's protest
survived as an independent protest when Anstec withdrew its
protest.
MTS also alleges that Caelum's challenge to the best value
determination is untimely because it did not file its own protest
until December 30, though it received a debriefing on
November 28. Based upon our analysis in Atlis, Anstec's
allegation of an improper best value determination survived when
Caelum and PDS pursued their interventions and their
interventions were deemed protests. Thus, because Caelum's
intervention was filed within ten working days of award and it
intervened in all grounds of protest raised by Anstec pertinent
to it, and the best value allegation was timely raised by Anstec,
Caelum may pursue the best value allegation.
MTS also contends that Caelum's allegation regarding a lack
of meaningful discussions is untimely. MTS contends that when
Caelum learned at the debriefing that its cost/price proposal was
only slightly higher than MTS' and that Caelum had no
deficiencies or weaknesses, Caelum had sufficient information to
allege a lack of meaningful discussions. We do not agree. This
limited information does not put an offeror on notice that
discussions were improper. Caelum's allegation regarding a lack
of meaningful discussions is based upon specific information
subsequently disclosed in the protest file, i.e., that the agency
did not conduct discussions with any offeror who was rated "2" or
above. There is no suggestion that this information was
disclosed during the debriefing or at any time prior to counsel's
review of the protest file. Thus, this ground of protest is
timely.
Did Protester Establish a Violation of the Procurement Integrity
Act?
Protester has raised a serious allegation of a violation of
the Procurement Integrity Act and its implementing regulations by
FAA, Mr. Garner, and MTS/OAO. Protester's Posthearing Brief at
22-32. In addressing this allegation, we recognize that the
agency orally concluded in March 1994 that there was no
procurement integrity violation which impacted an award to
MTS/OAO. Because this agency determination was based upon
incomplete factual information, rather than an investigation as
required by FAR 3.104-11, we afford it no weight.
Caelum argues that Mr. Garner was a procurement official on
this procurement, that he acquired procurement-sensitive
information, that there was a serious appearance of impropriety
when he went to work for OAO and assisted in MTS/OAO's proposal
efforts, and that Mr. Garner's conduct resulted in MTS/OAO
receiving an unfair competitive advantage in this
procurement.[foot #] 24 From this Caelum contends that
the award to MTS should be canceled, and that MTS/OAO should be
disqualified from any further competition on the FIPs
procurement.
The Act prohibits a contractor, during the conduct of
procurement, from knowingly soliciting or obtaining directly or
indirectly from an agency employee any proprietary or source
selection information regarding such procurement prior to the
award of a contract. 41 U.S.C. 423(a) (1988). The Act
prohibits a procurement official from knowingly soliciting or
accepting any promise of future employment or business
opportunity, seeking or receiving a gratuity or thing of value
from any competing contractor, or disclosing any proprietary or
source selection information to any person other than one
authorized to receive such information. 41 U.S.C. 423(b)
(1988).
Section (f) of the Act, Restrictions Resulting from
Procurement Activities of Procurement Officials, prohibits an
individual who was a procurement official from knowingly
participating in any manner as a representative of a competing
contractor in any negotiations leading to award or participating
personally and substantially on behalf of the competing
contractor in the performance of the contract. The Act contains
criminal and civil penalties for violation.
----------- FOOTNOTE BEGINS ---------
[foot #] 24 Caelum does not cite any evidence that
Mr. Garner actually disclosed procurement-sensitive information
___________________
to MTS/OAO. Rather, protester argues that the purpose of the Act
is to avoid after-the-fact determinations of how much
procurement-sensitive information was known to an individual and
"could have been conveyed to a competing contractor."
_____________________________
Protester's Posthearing Brief at 32 (emphasis added).
----------- FOOTNOTE ENDS -----------
The implementing regulations in the FAR set forth the
statutory prohibitions and restrictions of the Procurement
Integrity Act in Part 3.104-3. In addition, FAR 3.104-8(a)
expressly states that for a violation of the Procurement
Integrity Act to occur the conduct must be engaged in knowingly:
(a) Knowing violations. Neither a procurement
official nor a competing contractor violates the
restrictions set forth in 3.104-3 unless the prohibited
conduct is engaged in knowingly.
Thus, in order to establish a violation of the Procurement
Integrity Act and its implementing regulations, protester has the
burden of demonstrating both that Mr. Garner was a procurement
official and that he knowingly violated the proscriptions of the
Act and regulations. Protester has met neither burden here.
Mr. Garner was not a Procurement Official
Both the Act, 41 U.S.C. 423(p), and the implementing
regulations, FAR 3.104-4(g), define the term "procurement
official" to mean an agency employee who participated personally
and substantially in any of the following activities for a
particular procurement:
(i) Drafting a specification or a statement
of work for that procurement;
(ii) Review and approval of a specification
or statement of work developed for that
procurement;
(iii) Preparation or development of
procurement or purchase requests for that
procurement;
(iv) The preparation or issuance of a
solicitation for that procurement;
(v) Evaluation of bids or proposals for that
procurement;
(vi) Selection of sources for that
procurement;
(vii) Negotiations to establish the price or
terms and conditions of a particular contract or
contract modification; or
(viii) Review and approval of the award of a
contract or contract modification.
The touchstone for ascertaining whether an individual was a
procurement official is whether or not he or she participated
personally and substantially in such activities. FAR 3.104-4(g)
defines personally and substantially as follows:
"Participated personally and substantially" means
active and significant involvement of the individual in
activities directly related to the procurement. To
participate "personally" means directly, and includes
the participation of a subordinate when actually
directed by the supervisor in the matter. To
participate "substantially" means that the employee's
involvement must be of significance to the matter. For
example, the review of procurement documents solely to
determine compliance with applicable regulatory,
administrative, or budgetary requirements or procedures
does not constitute substantial participation in a
procurement. It requires more than official
responsibility, knowledge, perfunctory involvement, or
involvement on an administrative or peripheral issue.
A finding of substantiality should be based not only on
the effort devoted to a matter, but on the importance
of the effort. While a series of peripheral
involvements may be insubstantial, the single act of
approving or participating in a critical step may be
substantial.
Protester cites the following facts in support of its
contention that Mr. Garner was a procurement official in the FIPs
recompetition:
. As head of the planning and support division,
Mr. Garner had direct responsibility for the
efforts of AMI-110 and AMI-120.
. Mr. Garner directly supervised Ms. Cooley who was
gathering the necessary information for the FIPs
reprocurement beginning in December 1991 including
the government cost estimate, statement of work,
and skill mixes.
. Ms. Cooley had responsibility for planning the
FIPs reprocurement, and had access to proprietary
and procurement sensitive information.
. Mr. Garner initialed the procurement request which
contained the government's cost estimate, and was
aware of the government's cost estimate.
. Mr. Garner's initials represented his review and
approval of the procurement request.
. In 1992, the FIPs support services procurement was
the largest single procurement at the Center.
. If Mr. Garner or some other individual from
AMI-100 had not initialed the procurement request,
it would not have gone forward.
Protester's Posthearing Brief at 24-27.
Protester cites two additional indicia of Mr. Garner's
status as a procurement official which the Board totally
discounts -- the attestation of procurement integrity and the two
written FAA legal opinions. The testimony uniformly indicated
that the attestation's listing of Mr. Garner as a procurement
official was simply wrong, and that he never executed a FIPs-
specific procurement integrity certification. Protester cites
the FAA's October 1993 legal opinions stating that Mr. Garner was
a procurement official. The October opinions were based upon
incomplete information and in part upon the erroneous attestation
and were subsequently disavowed by the counsel who prepared them.
There is a dearth of precedent addressing the issue of who
is a procurement official within the meaning of the Procurement
Integrity Act. In Textron Marine, B-255580.3, 94-2 CPD 63, at
18 (Aug. 2, 1994), the Comptroller General construed the
Procurement Integrity Act to conclude that a former government
employee was not a procurement official. In Textron Marine, the
awardee's employee had worked formerly as an alternate
contracting officer's technical representative (COTR) on an
incumbent contract and for the subject procurement. The employee
had reviewed technical instructions (essentially task order
proposals) of the incumbent contractor which included pricing and
weights for each category of costs. This individual had
participated in drafting the statement of work, providing input
as to the Government's requirements and editorial suggestions.
Subsequently, he recused himself. Following his recusal, the SOW
was revised, and the information in the document became available
to all offerors. GAO concluded that this individual was not a
procurement official because his participation in the drafting of
the statement of work was not substantial. See also RAMCOR
Services Group, Inc., B-253714, 93-2 CPD 213 (Oct. 7, 1993)
(Government employee who was program manager at Federal Law
Enforcement Training Center (FLETC) was not a procurement
official since he had no involvement with drafting, reviewing, or
approving the RFP or specifications, evaluating proposals,
selecting sources, conducting negotiations, or reviewing or
approving award).
Applying the regulatory definition and precedent to the
instant case, we conclude that Mr. Garner was not a "procurement
official" within the meaning of the Procurement Integrity Act.
Mr. Garner participated personally but not substantially in the
FIPs recompetition. While Mr. Garner had official
responsibility, as the supervisor for Ms. Cooley, for putting
together the FIPs recompetition effort, Ms. Cooley, to quote her
own words, "took the ball and ran with it" and did not involve
Mr. Garner. The latter was at the time "focused on retirement"
and working on a major reorganization within the agency. Leo
Epperson, the director of AMI-1, also retained considerable
supervisory direction over Ms. Cooley, independent of Mr. Garner,
on this effort. All of Mr. Garner's alleged involvement in the
FIPs recompetition occurred well before the issuance of the
solicitation. He did not participate in drafting the statement
of work or in preparing the government estimate. According to
his testimony, he may not even have reviewed them, but simply
signed off on the procurement request so the recompetition could
go forward. Mr. Garner had no participation whatsoever in
drafting of the source selection plan or evaluating proposals.
He was not a member of the SEB, he never saw any competing
proposals, and he was not involved at all once he recused himself
on March 1, 1993 -- almost a month before the solicitation was
initially issued and six months before the solicitation was
reissued.
In comparing the detailed analysis performed by the
Comptroller General in the Textron Marine decision with the facts
of this case, we note that the former government employee in
Textron Marine had more recent exposure to a competitor's
sensitive information while in Government and more substantial
participation in that he actually participated in drafting and
revising the SOW.[foot #] 25
Nor has protester demonstrated that Mr. Garner knowingly
attempted to secure employment improperly or transmit proprietary
information to OAO. As explained in FAR 3.104-8, if a
procurement official satisfies his duty to inquire and acts in
good-faith reliance on an agency ethics opinion, he does not
knowingly engage in prohibited conduct. Here, Mr. Garner
consulted with FAA counsel before he initiated any employment
interviews. Upon the advice of that counsel, he immediately
recused himself from any activities in the FIPs recompetition.
Subsequently, when he believed that he might be hired as OAO's
proposal manager, he wrote another letter requesting an agency
opinion on his potential employment. Although in the course of
that letter, Mr. Garner did not disclose facts which at that time
he did not remember or never knew, i.e., his initialing the
procurement request and being listed on the attestation,
Mr. Garner nonetheless made a good faith effort to disclose his
potential employment and obtain the agency's approval. Once the
agency declined to give that approval, Mr. Garner left the
employment of OAO. The sum of Mr. Garner's activities thus
indicates that he had no intention to violate the Act.
----------- FOOTNOTE BEGINS ---------
[foot #] 25 We recognize that the Comptroller General in
Textron Marine was reviewing an agency's conclusion that no
_______________
procurement integrity violation existed and no unfair competitive
advantage was afforded to the awardee -- decisions to which the
Comptroller General affords deference.
----------- FOOTNOTE ENDS -----------
Caelum further claims as part of the alleged procurement
integrity violation that Mr. Garner's activities establish a
serious appearance of impropriety which necessarily taints the
award to MTS. Caelum argues that Mr. Garner must be presumed to
have obtained and retained source selection information pertinent
to KenRob, the government estimate, and the performance work
statement which translate into his communicating such information
to MTS/OAO during his employment at OAO. However, there is no
evidence to support such a conclusion. There is no evidence of
record that Mr. Garner remembered the PWS or the government
estimate or any KenRob proprietary information or that he
transmitted it to any member of the OAO/MTS team. All evidence
is to the contrary. Mr. Garner initialed the procurement request
in July 1992, and did not recall doing so. At that point in
time, the solicitation had not yet been issued. He was not
employed at OAO until August 1993, and did not participate in the
red team until October 1993. Both the government estimate and
the performance work statement could have changed in the year
between these events. In short, even if Mr. Garner had
remembered the information, it could have been inaccurate and
unreliable. Cf. FHC Options, Inc., B-2467933, 92-1 CPD 366, at
6 (Apr. 14, 1992) ("any inside information the former government
employee retained about source selection plan as it existed when
he was involved would have been obsolete, or at least unreliable,
by the time the RFP was issued").
Nor did Mr. Garner have access to such significant amounts
of procurement sensitive information relating to this procurement
that it would have been impossible for him to avoid using the
restricted information. Thus, we deem this case distinguishable
from Holmes and Narver Services, Inc./Morrison-Knudson Services,
Inc., a joint venture; Pam Am World Services, Inc., B-235906,
B-235906.2, 89-2 CPD 379 (Oct. 26, 1989), aff'd on
reconsideration, 90-1 CPD 299 (Mar. 16, 1990). There, a former
commander of the Redstone Arsenal Support Activity (RASA) who had
been a member of the Source Selection Advisory Council and had
reviewed a significant amount of procurement sensitive
information, retired, went to work for a vendor and drafted
several sections of that offeror's proposal. That proposal was
rated technically superior to all other proposals. GAO concluded
that because the proposal was drafted in significant part by the
former government official, it was unlikely that the individual
could have avoided using the restricted information to which he
had access in drafting the proposal. There, despite the absence
of specific evidence of bad faith, GAO concluded that it was
likely that this competing offeror had obtained an unfair
competitive advantage.[foot #] 26
----------- FOOTNOTE BEGINS ---------
[foot #] 26 In remedying that violation, GAO ordered
release to the other offerors of all similar procurement
sensitive information to which the official had access. This
included the acquisition plan, the independent government
(continued...)
----------- FOOTNOTE ENDS -----------
Here, we do not agree that the limited procurement sensitive
information protester has identified, i.e., the independent
government estimate and the draft performance work statement
appended to the procurement request, and Mr. Garner's limited
review of task proposals under the incumbent contract, would have
conferred a competitive advantage on MTS/OAO. In contrast, the
facts of this case more closely parallel cases in which there was
no improper competitive advantage by virtue of a firm's
employment of a former government employee. See, e.g., Stanford
Telecommunications, Inc., B-258622, 1995 WL 49397 (Feb. 7, 1995)
(former government project manager who had access to information
concerning protester's successful proposal for a recent contract
subsequently worked as a proposal consultant and program manager
for a competitor. Since no evidence refuted former government
employee's affidavit that he did not take any cost and pricing
data or procurement sensitive information with him and had no
recollection of any contract information from protester, there
was no basis to conclude that his employer had access to
sensitive cost information when preparing its proposal.); ITT
Federal Services Corp., B-253740.2, 94-2 CPD 30, at 7 (May 27,
1994) (former government employee who participated in drafting
PWS did not confer unfair competitive advantage where PWS was
substantially changed afterwards and released in the
solicitation); General Electric Government Services, Inc.,
B-245797.3, 92-2 CPD 196, at 11-12 (Sept. 23, 1992) (employment
of former COTR and ACO on incumbent contract did not confer
unfair competitive advantage where they could not remember or
reconstruct data in their possession); cf. TRW, Inc.,
GSBCA 11309-P, 92-1 BCA 24,389, at 121,789, 1991 BPD 205, at
12 (although improper social contact between an SEB member and a
contractor created an appearance of impropriety, Board found no
evidence of actual prejudice to any offeror or adverse effect on
the evaluation or selection decision and denied the protest).
Based upon these facts, we find no violation of the FAR
prohibition against organizational conflicts of interest.
FAR 9.501. Protester argues that this regulation prohibits
Mr. Garner from working on the same procurement for the
----------- FOOTNOTE BEGINS ---------
[foot #] 26 (...continued)
estimate, and the source selection plan. See also Litton
_________ ______
Systems, Inc., B-234060, 89-1 CPD 450 (May 12, 1989) (Awardee's
_____________
contract terminated where awardee actually received source
selection sensitive information improperly regarding its only
competitor); Naddaf International Trading Co., B-238768.2, 90-2
_________________________________
CPD 316 (Oct. 19, 1990) (agency's decision to disqualify
awardee from procurement upheld where former government official
who had participated in procurement before retirement, went to
work for a vendor, and made telephone calls to four government
employees while the award decision was pending concerning his
employer's eligibility for award; GAO noted: "There is no
reasonable explanation in the record for these discussions other
than to affect the award decision.").
----------- FOOTNOTE ENDS -----------
Government by supervising development of the requirements and for
the awardee by participating in OAO's proposal efforts. Contrary
to protester's argument, the services being procured here were
not developed under Mr. Garner's supervision and control.
Did FAA Perform a Proper Investigation of the Possible Violations
of the Procurement Integrity Act Pursuant to FAR 3.104-11?
Protester argues that the evidence proves that the
Government failed to conduct a proper investigation of any
possible violation of the Procurement Integrity Act as mandated
by FAR 3.104-11. Protester's Posthearing Brief at 49.
FAR 3.104-11 provides in pertinent part:
(a) If the contracting officer makes or receives a
disclosure of information pursuant to subsection 27(e)
of the Act or otherwise receives or obtains information
of a violation or possible violation of subsections
27(a), (b), (d), or (f) of the Act (see 3.104-3), the
contracting officer shall determine whether the
reported violation or possible violation has any impact
on the pending award or selection of the source
therefor.
(1) If the contracting officer concludes
that there is no impact on the procurement, the
contracting officer shall forward the information
concerning the violation or possible violation,
accompanied by appropriate documentation
supporting that conclusion, to an individual
designated in accordance with agency procedures.
With the concurrence of that individual, the
contracting officer shall, without further
approval, proceed with the procurement. The
individual concurring with that conclusion shall
forward all information relating to the violation
or possible violation to the HCA, or his or her
designee, to satisfy the disclosure requirements
of subsection 27(e)(2) of the Act.
(2) If the individual reviewing the
contracting officer's conclusion does not agree
with that conclusion, he or she shall advise the
contracting officer to withhold award and shall
promptly forward the information and documentation
to the HCA or his or her designee.
(3) If the contracting officer determines
that the violation or possible violation impacts
the procurement, the contracting officer shall
promptly forward the information to the HCA or his
or her designee.
(b) The HCA or his or her designee receiving any
information describing an actual or possible violation
of subsections 27(a), (b), (d), or (f) of the Act,
shall review all information available and take
appropriate action in accordance with agency
procedures, such as--
(1) Advising the contracting officer to
continue with the procurement;
(2) Causing an investigation to be
conducted;
(3) Referring the information disclosed to
appropriate criminal investigative agencies; or
(4) Determining that a violation occurred.
The regulation further provides that if the HCA determines
there has been a violation, then the HCA may direct the
contracting officer to cancel the procurement, disqualify an
offeror, take any other appropriate actions in the interests of
the Government, and void or rescind any awarded contract.
We agree with Caelum that the agency did not follow this
regulation. Although the contracting officer acted with the best
of intentions -- raising the issue with her superior and counsel
-- she never independently determined whether the possible
violation had any impact on the pending award or selection.
Rather, at the time of award she concluded that there was no
violation, relying upon oral advice of counsel. Yet counsel do
not have the responsibility for implementing FAR 3.104-11 or
investigating procurement integrity violations. Moreover,
counsel's advice was based only upon a partial generic factual
scenario relayed to three other attorneys -- one of whom did not
have time to consider it.
The contracting officer was obligated to forward the
information with appropriate supporting documentation to "an
individual designated in accordance with agency procedures."
FAR 3.104-11(a)(1), (2). That was never done. The agency
designee could then have concurred with the contracting officer
or not. Id. That was never done. The agency designee was then
required to forward all information to the HCA to satisfy the
disclosure requirements of the Act. Id. That was never done.
The agency here failed to investigate properly a serious
procurement integrity allegation in the context of a $50,000,000
procurement -- never putting the generic scenario transmitted to
the experts in writing, leaving out the details of Mr. Garner's
prior employment, never talking to Mr. Garner, never obtaining a
clear opinion from the expert on ethics in Washington,
DC[foot #] 27 -- and all of this after counsel had
concluded in writing on two prior occasions that there was a
violation.
Nor do we accept the post hoc explanation offered by
government witnesses at the hearing that Mr. Garner's activities
did not rise to the level of a "possible violation" but rather
were merely a "concern." After characterizing Mr. Garner's
activities as a possible procurement integrity violation in
writing throughout the course of this procurement, government
witnesses recharacterized it as merely a concern, contradicting
documentary evidence and depositional testimony. We find the
recharacterization to lack credibility.
FAR 3.104-4(1) defines "possible violation" as "specifically
identified or documented circumstances that provide a reasonable
basis to believe that a violation of the Act may have occurred.
Rumor and hearsay are not, by themselves, a reasonable basis to
conclude that a possible violation exists." The facts in this
case are not rumor and hearsay. Mr. Garner initialed the
procurement request, he may have reviewed it, and he saw the
government estimate, KenRob's source selection sensitive
information, and the draft PWS. Additionally, he was a manager
in the IRM arm of the Center which was responsible for initiating
the FIPs recompetition, he recused himself from that effort, and
he had responsibility up until the time of his recusal for that
effort as the supervisor of Cheryl Cooley. He was initially
hired by OAO as "a proposal facilitator" for the FIPs competition
just prior to the time the solicitation was reissued. The
contracting officer on two separate occasions sought advice from
FAA counsel as to whether there was a "possible procurement
integrity violation," and this is reflected in minutes of the
SEB.
MTS argues that finding a violation of this regulation does
not require that the protest be sustained since any investigation
that the agency should have conducted has already been
accomplished through the protest process. The Board agrees with
MTS that no useful purpose would be served by remanding the
matter to the agency for an investigation when the facts have
been sufficiently aired in this proceeding. Although this
violation prejudiced the procurement process by perpetuating
misunderstandings which could have been put to rest long ago, had
the agency done a proper investigation, given the fully developed
record here we conclude that it did not prejudice Caelum. The
agency's violation of this procedural regulation did not
----------- FOOTNOTE BEGINS ---------
[foot #] 27 The draft memorandum purporting to contain
the FAA's chief ethics officer's opinion was completely at odds
with the law. That draft memorandum concluded that a former
government employee who was procurement official could work on a
competitor's proposal with impunity.
----------- FOOTNOTE ENDS -----------
adversely impact the selection decision or affect Caelum's
opportunity to compete. We deny this ground of protest.
Did FAA Fail to Conduct Meaningful Discussions with Caelum and
Fail to Afford Caelum an Opportunity to Submit a BAFO?
Caelum contends that FAA's decision not to hold technical
discussions with any offeror in a technical subfactor for which
the offeror was rated a "2" (satisfactory) or higher improperly
denied offerors an opportunity to improve their proposals at
BAFOs and to provide the best value to the Government. FAA and
MTS counter by arguing that the contracting officer correctly
limited technical discussions to those areas of proposals that
had scored less than "2" because those areas were not
"deficiencies." Intervenor MTS' Posthearing Brief at 101; FAA's
Reply Brief at 12. Further, MTS contends that Caelum has not
demonstrated any prejudice by virtue of the FAA's failure to
conduct discussions.
We deny these grounds of protest. Even assuming arguendo
that meaningful discussions were not held with Caelum in this
procurement, Caelum has failed to demonstrate prejudice. Caelum
has not identified any area of its proposal which it claims
warranted discussions. Nor has Caelum demonstrated that it could
have improved its proposal in any material way so as to raise its
score or increase its advantage over MTS.
Nor did the extensive record of these proceedings contain
any suggestion of an area of Caelum's proposal which should have
been discussed.[foot #] 28 Thus, were we to grant the
relief Caelum requests -- a reopening of discussions -- we would
be hard pressed to identify an area to be discussed.
We are troubled by the FAA's conduct of negotiations here --
automatically applying the long-standing Center policy dictating
that discussions could be held only as to subfactors ranked less
than "2," rather than exercising judgment and deciding whether
discussions were warranted based upon this specific acquisition
and the individual proposals.[foot #] 29 We note,
----------- FOOTNOTE BEGINS ---------
[foot #] 28 Cf. Sperry Corp., 65 Comp. Gen. 195 (1986),
___ ____________
86-1 CPD 28 (agency should have conducted discussions where two
acceptable technical proposals contained, in GAO's view,
informational deficiencies or omissions).
[foot #] 29 FAR 15.610(b) mandates that the content and
extent of discussions is a matter of the contracting officer's
judgment, based on the particular facts of each acquisition.
Here, because these FAA officials adhered to an artificial
standard wholly unrelated to the particular acquisition, but
applied by the Center and the contracting officer in every
negotiated procurement "bar none," they failed to analyze the
(continued...)
----------- FOOTNOTE ENDS -----------
further, that the application of such a policy could unfairly
prejudice offerors and result in unequal treatment. However,
that did not occur here. The only competitor in the running with
Caelum, MTS, also was not the beneficiary of discussions and was
similarly afforded no opportunity to change any aspect of its
technical proposal at BAFO.
In sum, because Caelum failed to identify any area of its
proposal which could have been improved by discussions, we hold
that protester suffered no prejudice by virtue of the agency's
failure to conduct technical discussions with it.
Did the Government Perform an Improper Cost Evaluation?
Protester further argues that FAA failed to evaluate costs
for "completeness, reasonableness, and realism." Protester's
Posthearing Brief at 72-76. Protester argues that because the
agency did not conduct a "most probable cost" analysis, did no
cost realism comparison, did not document any cost realism
analysis, and did not adjust any offeror's proposed cost, the
agency violated the terms of the RFP. In essence, Caelum claims
that the Government treated this procurement for estimated multi-
year requirements as a firm fixed-price contract for firm
government requirements.
FAA and MTS contend that the cost evaluation was adequate in
that the PET reviewed
MTS' Posthearing Brief at 50-51, 105;
FAA's Reply Brief at 13. MTS contends that given the fixed-price
nature of the contract, this cost analysis was more than
sufficient. Id. at 105. Further, MTS points out that its expert
testified that the cost analysis was appropriate in that for both
MTS and Caelum the proposed price was the best estimate of the
ultimate cost to the Government. Id.
While the Government's cost evaluation could have been more
accurate and better documented, we conclude that despite these
problems, protester did not demonstrate that the cost realism
conclusion was erroneous or illegal. Thus, we deny this ground
of protest.
Did FAA Conduct Improper Post-BAFO Discussions with MTS?
----------- FOOTNOTE BEGINS ---------
[foot #] 29 (...continued)
proposals to consider whether there were uncertainties or
deficiencies which should have been discussed.
----------- FOOTNOTE ENDS -----------
Caelum contends that FAA violated FAR 15.611(c) by
conducting post-BAFO discussions with MTS and permitting it to
modify its proposal. Protester's Posthearing Brief at 76-78. It
is uncontroverted that, after BAFOs, FAA asked MTS for additional
information
Caelum
contends that this type of information had a significant impact
on the Government's evaluation of the technical factor of risk
which amounted to of the overall technical score. Further,
Caelum points out that the late submission by MTS of this
information caused a change in the SEB's final report presented
to the SSO.
FAA and MTS contend that the post-BAFO communication was
related to MTS' responsibility and does not fall within the
definition of discussions in FAR 15.601.[foot #] 30
Further, MTS argues that neither the technical nor the cost
evaluation of MTS was affected by the post-BAFO information.
MTS' Posthearing Brief at 107-11. Finally, MTS argues that any
minor impact this information may have had on the evaluation of
MTS' cost proposal was de minimis and nonprejudicial.
We agree that the agency violated FAR 15.611(c) by seeking
and receiving information from MTS post-BAFO, but conclude that
this violation did not prejudice Caelum. Thus, we deny this
ground of protest.
"In negotiated procurements such as this . . ., the line
between responsibility factors and proposal evaluation factors is
not a sharp one." Delta Data Systems Corp. v. Webster, 744 F.2d
197, 200 (D.C. Cir. 1984). So too, the information submitted by
MTS post-BAFO can be properly characterized as "double edged,"
affecting the cost evaluation for completeness, the technical
factor of risk, and a legitimate responsibility determination.
See Technology, Management & Analysis Corp. v. Environmental
Protection Agency, GSBCA 12082-P, 93-2 BCA 25,711, 1992 BPD
406.
----------- FOOTNOTE BEGINS ---------
[foot #] 30 FAR 15.601 defines discussions as:
Any oral or written communication between the
Government and an offeror (other than a
communication conducted for the purpose of minor
clarification), whether or not initiated by the
Government, that (a) involves information
essential for determining the acceptability of a
proposal, or (b) provides the offeror an
opportunity to revise or modify its proposal.
----------- FOOTNOTE ENDS -----------
We believe that MTS' post-BAFO information addressed
evaluation factors. The RFP expressly required that offerors
submit financial statements, audited if available, including
balance sheets and income statements, as part of their price/cost
proposals. In its BAFO, Caelum submitted a letter from a bank
committing to provide in working capital. Further, the
RFP mandated that cost and price would be evaluated on the basis
of completeness as well as reasonableness and realism.
Completeness was defined to mean that offerors were to provide
"sufficient data to allow complete analysis and evaluation of
proposed costs . . . ." The technical evaluation factor of risk
to the Government expressly stated that the Government would
evaluate each technical proposal based upon perceived risks
including "the presence of a sound plan to ensure continuity of
operations and quality performance." Protest File, Exhibit 6 at
67.
Further, FAA solicited this type of information from
offerors during initial discussions. MTS was then advised "that
its financial statements submitted were not certified." Protest
File, Exhibit 21 at 27. MTS was also advised during discussions
that OAO had submitted financial statements for the wrong years,
further suggesting that FAA itself considered the type of
information that it solicited from MTS post-BAFO to have been the
proper subject of initial discussions to enable offerors to
revise their price proposals.
Given these circumstances, the agency violated FAR 15.611(c)
by conducting post-BAFO discussions and permitting MTS to submit
information which modified its cost proposal and related to
technical risk.
However, Caelum has not demonstrated prejudice as a result
of this violation. Neither the TET nor the PET used the
information in their respective evaluations of MTS' proposal, and
MTS' technical score and cost remained unchanged after receipt of
the post-BAFO information. Although the post-BAFO information
was reflected in the SEB's final report, Caelum has not
demonstrated that the inclusion of the post-BAFO information
impacted the selection. To the contrary, the testimony of the
SSO indicates that it did not. The SSO stated that he considered
MTS and Caelum essentially equivalent in terms of their
respective cost proposals.
Moreover,
Caelum did not suggest that it could have submitted enhanced
information post-BAFO on its financial capability.
Thus, while the FAA violated the proscription against
conducting post-BAFO discussions, Caelum has failed to show any
prejudice by virtue of that violation. As our appellate
authority recognized in Grumman Data Systems Corp. v. Widnall, 15
F.3d 1044, 1048 (Fed. Cir. 1994), "[O]verturning awards on de
minimis errors wastes resources and time, and is needlessly
disruptive of procurement activities and governmental programs
and operations. Andersen Consulting Co., 959 F.2d at 932[.]"
See also Fortran Corp. v. Department of Transportation,
GSBCA 12952-P, 1994 BPD 245, at 7 (Oct. 27, 1994),
reconsideration denied, 1994 BPD 281 (Dec. 6, 1994).
Did FAA Conduct an Inadequate and Unreasonable Best Value
Analysis?
Caelum contends that in procurements where technical merit
is more important than cost in an evaluation scheme, the
Government may not choose a lower rated, lower cost proposal
without a specific finding that the technically superior proposal
is not worth the cost premium. Protester's Posthearing Brief at
60. Here, because of the closeness of technical scores and
because the SSO believed that either company would use the same
incumbent personnel for performance, the SSO deemed the two
proposals to be technically equivalent and cost became the
"driving factor." He then determined that it was "not in the
taxpayers' interest to spend more." Transcript at
885. Protester has not demonstrated that this determination was
erroneous or violated statute or regulation. As we recognized in
CRC Systems, Inc., GSBCA 9720-P, 89-1 BCA 21,411, at 107,918,
1988 BPD 302, at 18, reconsideration denied, GSBCA 9720-P-R,
1989 BPD 19 (Jan. 9, 1989) "Having reasonably concluded the
proposals were technically equal from this standpoint, the
contracting officer was permitted under the solicitation to
regard price or cost as the determinative factor. Indeed, the
Board has held that even under an evaluation scheme where
technical factors are given more weight than cost the Government
is still not expected to ignore cost." (Citations omitted.)
Caelum also argues that the SEB's final report to the SSO
was inaccurate and incomplete and deleted significant information
to its prejudice. Caelum requests that the FAA be required to
conduct a proper best value analysis. Although the SEB report
did contain some errors and was incomplete, the SSO, when
presented with full and accurate information during the protest
hearing, credibly testified that even correcting the inaccuracies
in the report, he remained convinced that MTS' proposal
constituted the best value to the Government. Based upon our de
novo review of this matter, we find no basis to overturn the best
value determination as explained by the SSO and supported by the
full record.
Decision
The protest is DENIED.
_____________________________
MARY ELLEN COSTER WILLIAMS
Board Judge
We concur:
____________________________ ____________________________
CATHERINE B. HYATT MARTHA H. DeGRAFF
Board Judge Board Judge