Wednesday, July 7, 2010

Organizational Conflicts of Interest (OCI)

We have discussed Organizational Conflicts of Interest (OCIs) a few times. Sometimes contractors find themselves in situations where OCIs can give them an unfair advantage in bidding on contracts. OCIs include impaired objectivity, access to non-public information, and biased ground rules. If a contracting officer determines that an OCI exists, the contractor must develop an adequate and acceptable mitigation plan or choose not to bid on the solicitation in question. Refer to FAR 9.5 for the regulatory coverage of OCIs.

There have been a few GAO decisions involving OCIs. A decision from last May helps illustrate the difficulty of successfully challenging an award on the basis that the winner had an unfair advantage. In this case, the Navy wanted to purchase some communications capabilities that included terminals on land and on ship plus satellite resources owned by a company called Intelsat. All of the bidders had to use the Intelsat systems for the satellite portion of the contract. Intelsat also bid on the contract and won. One company protested on the basis that Intelsat knew the price they had proposed to all of the competing bidders and that gave them an unfair advantage because it could price its bid accordingly.

Well, that did seem a little unfair to us but the GAO ruled that the situation did not constitute an OCI as currently defined by the FAR regulations. Intelsat did not gain a competitive advantage based on its possession of proprietary information that was obtained from a Government official without proper authorization, or source selection information . . . that is relevant to the contract but is not available to all competitors, and such information would assist that contractor in obtaining the contract. The GAO concluded that negotiations between competitors do not give rise to an OCI, within the meaning of FAR part 9.5.

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