Another GAO Update

MMI-Federal Marketing Service Corp., B-297537, February 8, 2006
DIGEST
Protest is sustained where the agency unreasonably determined that awardee’s quotation demonstrated compliance with the Berry Amendment’s domestic production requirements, in light of countervailing pre-award information that the awardee would not comply.

DECISION
We sustain the protest.

Good statement concerning GAO's standard of review:

In reviewing an agency’s technical evaluation of vendor submissions under an RFQ, we will not reevaluate the quotations; we will only consider whether the agency’s evaluation was reasonable and in accord with the evaluation criteria listed in the solicitation and applicable procurement statutes and regulations. American Recycling Sys., Inc., B-292500, Aug. 18, 2003, 2003 CPD ¶ 143 at 4. In determining the technical acceptability of a quotation, an agency may not accept at face value a promise to meet a material requirement, where there is significant countervailing evidence reasonably known to the agency that should create doubt whether the vendor will or can comply with that requirement. See Maritime Berthing, Inc., B-284123.3, Apr. 27, 2000, 2000 CPD ¶ 89 at 9. As relevant here, an agency should go beyond a firm’s self-certification regarding domestic manufacturing requirements where the agency has reason to believe, prior to award, that a vendor will notprovide compliant products. See Leisure-Lift, Inc., B-291878.3, B-292448.2, Sept. 25, 2003, 2003 CPD ¶ 189 at 3-4.

Another case -- Agencies Must Reasonably Consider and Evaluate OCIs

The Federal Acquisition Regulation (FAR) instructs agencies to identify potential organizational conflicts of interest (OCI) as early as possible in the procurement process and to mitigate significant potential conflicts before contract award. FAR 9.504. Contracting officers must exercise common sense, good judgment, and sound discretion in determining whether a significant potential conflict of interest exists and in developing an appropriate means for resolving it. FAR 9.505. Moreover, when evaluating potential OCIs, contracting officers should obtain the advice of counsel. FAR 9.504. In Greenleaf Construction Company, Inc., the offeror being considered for the award of a HUD contract also owned a HUD closing agent for the same area. To mitigate this OCI, the offeror transferred full ownership of the closing agent through the use of a purchase agreement. Prior to award, HUD discovered and advised the offeror of the need to further resolve this conflict as a result of learning that the offeror had retained a profit interest in the closing agent. The purchase agreement was subsequently amended to remove the profit interest and instead provided for a final fixed price to be paid over a number of weeks. Because of these changes, the contracting officer concluded that the OCI had been resolved and awarded the contract. Greenleaf protested the award and argued that the amended purchase agreement continued to pose an unacceptable OCI because the purchaser was still required to make significant monthly payments to the awardee. The GAO sustained the protest, holding that HUD failed to reasonably consider or evaluate the OCI implications resulting from the amended purchase agreement. The GAO determined that the contracting officer had failed to consider whether the magnitude of the payments was such to impair the judgment and objectivity of the awardee, or whether suitable mitigation was required to address the potential OCI.

Greenleaf Construction Company, Inc. From Steve Copetas at DAU South