This article is an excerpt from the 2023 edition of The Art of Tendering: A Global Due Diligence Guide.
In its July 2022 decision in Deloitte Consulting LLP; ManTech Advanced Systems International, Inc., the U.S. Government Accountability Office (GAO) denied a conflict of interest claim after finding no evidence that an external government advisor gave an unfair advantage to a competing bidder who employed the external advisor’s brother.
The dispute dealt with a Department of Defense, Defense Health Agency (DHA) Request for Quotations (RFQ) for an enterprise information technology services integrator (EITSI). The complainants alleged that the government failed to identify a conflict of interest created by the involvement of an external government advisor (referred to as Mr. X) whose brother (referred to as Mr. Y) was employed by Capgemini, a competing bidder. As the GAO noted, a prior internal government review concluded that none of the vendors were prejudiced by the government’s use of external advisors during the procurement process and that none of those advisors unduly influenced the evaluators. As the GAO confirmed, mitigation measures were put in place before the solicitation was issued and those measures were strictly enforced during the process.
Turning to the allegations of “personal conflict of interest” involving the two brothers, the GAO found that that this type of conflict can apply to “contractor employees”, including the external advisors used in the challenged RFQ process:
Personal conflicts of interest may arise in the context of individual contractor employees who assist the government during procurements. See FAR 3.101-1, 3.1101; Savannah River Alliance, LLC, B-311126 et al., Apr. 25, 2008, 2008 CPD ¶ 88 at 23. A “personal conflict of interest” means a “situation in which a covered employee has a financial interest, personal activity, or relationship that could impair the employee’s ability to act impartially and in the best interest of the Government when performing under the contract.”
However, the GAO also cautioned that “the identification of a conflict of interest is a fact-specific inquiry that requires the exercise of considerable discretion.” Turning to the facts of the case, the GAO noted that Mr. Y, the brother employed at Capgemini, held “a middle management position with no ownership or control of the company.” Further, Mr. Y was not involved in Capgemini’s bid submission. In fact, the GAO noted that when Capgemini became aware of the potential conflict, it voluntarily established an organizational, physical, and informational firewall to disallow Mr. Y from participation, input, or support to Capgemini’s solicitation response and that this recusal protocol was already in effect prior to the release of the RFQ. Capgemini also asserted that Mr. Y never discussed the procurement with his brother, Mr. X.
Further, the government asserted that “Mr. X’s primary role during evaluation was to assist the staffing subfactor team” and that this work was performed “under the close supervision of the technical factor chair.” The government confirmed that Mr. X’s advice to the staffing subfactor team was limited to “assisting the team in developing an effective evaluation methodology that was consistent with the terms of the solicitation while ensuring that individual evaluators could exercise their own judgment and make their own assessments on the basis of their professional knowledge and technical expertise.” The government’s contracting officer also asserted that in his personal observations, Mr. X “focused on process rather than ultimate evaluation results”. The contracting officer also confirmed that he “did not observe any undue influence” from any of the external advisors on the outcomes or results of the evaluations.
The GAO found no evidence of unequal access to information arising out of the alleged conflict, noting that Mr. X had signed a non-disclosure agreement when retained on the project and had declared “under penalty of perjury” that he did not discuss the project with his brother or any other Capgemini employees. Further, the GAO found that “the record includes representations from multiple procurement participants to demonstrate that Mr. X did not evaluate or rate quotations, exert influence on evaluators in any way that favored any competitor, and did not make a selection recommendation.” Further, the GAO found no basis to conclude that Mr. X failed to provide impartial advice to the project.
The GAO denied the protest, finding that the government’s contracting officer had reached a reasonable “no conflict” conclusion since the complainants had failed to provide any compelling evidence to the contrary:
In sum, we find that the contracting officer reasonably concluded that there were no actual personal or organizational conflicts of interest present in DHA’s conduct of the procurement, and the protesters’ arguments lack the hard facts required for our Office to sustain the protest. Rather, the record shows that the contracting officer gave meaningful consideration to all of the facts and concluded that, despite his familial connection to Mr. Y, Mr. X did not influence the evaluation results or selection decision. Additionally, we find no basis to question the contracting officer’s conclusion that the only communications between the brothers were personal and unrelated to the EITSI procurement, and neither brother stands to gain financially or otherwise from the award to PES that would give rise to a personal conflict of interest. Accordingly, we deny the protesters’ allegations.
As this case illustrates, distinguishing potential conflicts from actual conflicts remains a fact-specific exercise. When faced with allegations of potential conflict, purchasing institutions should conduct a thorough factual analysis to assess the merits of those allegations. They should also adopt proactive measures, including the implementation of non-disclosure protocols and recusal procedures, to help mitigate against the risk that a potential conflict could undermine the integrity of a tendering process.
