CO Did Not Consider Potential Unfair Competitive Advantage
December 14, 2009
A contract award for managed care support services was tainted by the appearance of impropriety because the government never considered whether the facts surrounding the awardee's use of a former government official to prepare its proposal created an unfair competitive advantage. The protest involved a request for proposals issued by the Department of Defense TRICARE Management Activity for health care services for three geographic regions. The protester contended the government should have excluded the awardee from the competition because it had unequal access to non-public, competitively useful information through its employment of the agency's former Chief of Staff, whom the awardee employed to prepare its proposal. According to the protester, the former official had access to non-public source selection sensitive information about the protested procurement and relevant non-public propriety information regarding the protester's performance of an incumbent contract.
Former Official
The Comptroller General sustained the protest, finding the former official had access to the protester's non-public proprietary information and the contracting officer never considered the appearance of impropriety. Under FAR 3.101-1, agencies have an obligation to avoid even the appearance of impropriety. Further, case law holds "where a firm may have gained an unfair competitive advantage through its hiring of a former government official, the firm can be disqualified from a competition based on the appearance of impropriety ... even if no actual impropriety can be shown, so long as the determination of an unfair competitive advantage is based on facts and not mere innuendo or suspicion." The record showed a draft of the RFP was issued three months after the official left the agency, and the official started working for the protester and on the protester's proposal five months after that. Also, the former official continued to have access to his e-mail account, and he accessed the account on at least three occasions after he began working for the protester. While at the agency, the official attended at least four high level meetings of a committee whose role was to develop the government's policy and goals for the procurement, and at one of the meetings, he received a "procurement sensitive" position paper that contained non-public price and cost information and included the protester's total price for a service center. Finally, the former official had access to monthly reviews of the protester's performance on the incumbent contract. The protester established a prima facie case that an appearance of an impropriety was created, and the CO should have reviewed the matter, as required by FAR 3.101-1.
Evaluation Improprieties
The protest was also sustained with respect to the past performance evaluation, the realism evaluation of the awardee's price/cost proposal, and the government's failure to consider the protester's proposed provider network discounts in the final selection decision. The Comptroller General recommended the government conduct a new evaluation and make a new source selection decision. Additionally, the Comptroller General recommended the CO perform a thorough review, regarding the scope of the former official's access to non-public proprietary information and source selection sensitive information which could have afforded the awardee a competitive advantage in the preparation of its proposal, and then determine what actions to take to address the appearance of impropriety. (Health Net Federal Services, LLC, 24 CGEN ¶112,966)