Preventing Organizational Conflict of Interest Federal Acquisition Act, P.L. No 117-324 (January 3, 2023)

• President Biden signed a law mandating updates to the FAR provisions that address Organizational Conflicts of Interest (OCI).
• The statute mandates that agencies provide definitions for three types of OCI: unequal access to information, impaired objectivity, and biased ground rules.
• The statute further calls for additional guidance and illustrative examples, and new solicitation provisions and contract clauses to address OCI issues.

The FAR 9.5 OCI provisions have been out-of-step with practice for well over a decade. Government and private practitioners alike rely primarily on a body of guidance from the GAO, Court of Federal Claims, and Federal Circuit to analyze these issues. There is certainly room for updated regulations. The question is whether the FAR Council can implement those updates in a way that improves the status quo, rather than requiring the acquisition community to re-assess everything we know about OCIs.

The DOJ, SEC, and a company under monitorship announced in the waning days of 2022 that they had mutually agreed to extend an independent compliance monitorship by a year for (in the view of the government) failing to adequately investigate or disclose a compliance violation relating to conduct in Iraq (Ericsson to Stay Under U.S. Compliance Monitor an Extra Year - WSJ). This demonstrates the Justice Department’s current emphasis on corporate accountability and shows how Deputy Attorney General Monaco’s remarks about monitors, here Further Revisions to Corporate Criminal Enforcement Policies, September 15, 2022 (justice.gov), are put into practice.

Ekagra Partners, LLC v. United States, No. 22-1038C (December 21, 2022) 

• In the Court’s final bid protest decision of 2022, Judge Solomson provided a detailed discussion of a plaintiff’s burden to demonstrate prejudice for purposes of establishing standing and competitive prejudice.
• While no party affirmatively disputed the protester’s standing, Judge Solomson walked through each claim to assess whether the plaintiff made factual allegations sufficient to establish that, assuming the claim were to succeed, the result would have a material impact to the award decision. Judge Solomson found that two of the five claims failed to sufficiently allege prejudice for standing purposes.
• Judge Solomson also identified and discussed shortcomings in the plaintiff’s prejudice arguments on the merits. The opinion explains that it is insufficient for prejudice purposes to allege that, but for an evaluation error, the protester’s evaluation would have received a higher rating; the plaintiff must go further and explain how that higher rating would translate to an increased likelihood of receiving award.

Prejudice is one of the most important aspects of bid protest litigation. It is the protester’s burden to establish prejudice, both to demonstrate standing and to succeed on the merits of each claim. Factual allegations and arguments relating to prejudice should feature prominently in the complaint and merits briefing.

Spatial Front, Inc., B-420921.2; B-420921.3, (December 21, 2022) (Published January 6, 2023)

• GAO sustained a protest challenging the issuance of a task order because the awardee’s quoted labor categories did not align to the labor categories on its GSA Federal Supply Schedule contract.
• GSA’s FSS program provides agencies a simplified process for obtaining commonly used commercial supplies and services. FSS program procedures also satisfy the requirement for full and open competition; non-FSS products and services may not be purchased using FSS procedures. Thus, as a precondition of task order award, all goods or services quoted must be on the vendor’s GSA FSS contract.
• Here, in response to a protest that the awardee’s quoted labor categories were not aligned to the labor categories in its FSS contract, the Department of Agriculture raised several defenses, including that the labor category mapping was previously assessed when the agency established the subject blanket purchase agreement with the awardee in 2020. GAO rejected that argument because the agency failed to contemporaneously document any such assessment.
• More substantively, GAO found that the awardee’s “proposed labor categories were, in numerous instances, not within the scope of its FSS contract,” including a Developer labor category that was mapped to a Quality Assurance Engineer labor category. GAO thus concluded that the awardee’s quotation could not properly form the basis for award.

Misaligned labor categories for GSA FSS contract holders continues to be a ripe area for bid protests; the remedy for a successful bid protest can be substantial. While GAO’s review of labor category mapping allows for a “degree of agency discretion,” that discretion is “tempered by the requirement that the agency adequately document the results of its evaluation.” Of course, agencies must work with the labor categories set forth on FSS contracts, and the math has to add up.

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