BNUMBER:  B-271962
DATE:  July 9, 1996
TITLE:  Daniel Eke and Associates, P.C.

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Matter of:Daniel Eke and Associates, P.C.

File:     B-271962

Date:July 9, 1996

Daniel Eke for the protester.
Mark W. Foster, Esq., and Jonathan H. Levy, Esq., Zuckerman, Spaeder, 
Goldstein, Taylor & Kolker, for Development Alternatives, Inc.; Joel 
H. Lamstein for World Education; and Marina Fanning for Management 
Systems International, the intervenors.
Rosemary T. Rakas, Esq., Agency for International Development, for the 
agency.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that firm should be excluded from the competition for an 
economic development contract in Uganda based upon its prior 
involvement in preparing a concept paper for the project is denied 
where the record shows that the concept paper did not lead directly, 
predictably, and without delay to the solicitation's work statement; 
that the concept paper is a publicly available document; and that any 
competitive advantage obtained by the firm by virtue of its 
preparation of the concept paper was not created by any improper 
preference or other unfair action by the agency.

DECISION

Daniel Eke and Associates, P.C., protests the decision of the Agency 
for International Development (AID) to allow certain firms to compete 
under request for proposals (RFP) No. UGANDA 961 to implement the 
Private Enterprise Support, Training and Organizational Development 
(PRESTO) Project in Uganda.  Daniel Eke contends that these firms 
should be excluded from the competition based upon their prior 
involvement in preparing a concept paper for the Project.

We deny the protest.

BACKGROUND

The goal of the PRESTO Project is to raise low incomes in Uganda by 
increasing employment and productivity in micro-, small-, and 
medium-sized enterprises.  AID's Uganda Mission (AID/Uganda) 
anticipates achieving this goal through three mutually reinforcing 
areas of assistance:  increasing access to microfinancial services; 
strengthening business associations; and improving the policy and 
regulatory environment for business start-up and expansion.

Although it had already analyzed the development problems faced by 
small Ugandan businesses, the agency wanted additional study before 
submitting the project for final review and funding.  To that end, 
AID/Uganda procured consulting services under the agency's Growth and 
Equity through Microenterprise Investments and Institutions (GEMINI) 
contract, as well as another AID contract, to obtain a "concept paper" 
analysis of microenterprise credit, and of non-financial, technical 
assistance and training for microenterprises.  

The GEMINI Team[1] visited Uganda during February and March 1995.  The 
Team met with AID staff, visited Ugandan businesses, interviewed 
Ugandan businesspeople, and reviewed publicly available literature on 
private sector development in the country.  Contrary to AID/Uganda's 
expectation, the Team did not deliver the concept paper prior to 
departing Uganda in March.  Instead, the agency received only rough, 
incomplete, and inaccurate individual Team members' drafts, and the 
Team leader's promise to forward a completed concept paper within 
weeks.  The concept paper did not arrive as promised.   

AID/Uganda was required to prepare and obtain internal approval of a 
project paper--which contains a detailed justification of the 
project's feasibility, an estimated budget, an implementation plan, 
and expected results--in order to receive funding for the PRESTO 
Project.  In April and May, the then-Chief of AID/Uganda's General 
Development Office (GDO) and its current Chief wrote the project 
paper.  Both state that they did not rely upon the concept paper 
because DAI had not provided it, but that, as discussed below, they 
did adopt certain broad and fairly generic ideas which evolved from 
the GEMINI Team's work in Uganda.  The project paper, absent any 
competitively sensitive information, was made publicly available in 
July.

The current Chief of the GDO began writing the solicitation's 
statement of work (SOW) in September and completed it in late 
November.  He states that he relied exclusively upon the project 
paper, and did not use the concept paper, which arrived in October.  
He explains that, by this time, there was already a working draft of 
the SOW, and AID had no need to refer to what he terms the "obsolete" 
concept paper.  This concept paper is also a publicly available 
document.

In accordance with Federal Acquisition Regulation (FAR)  sec.  9.504(a), 
before the solicitation was issued, the contracting officer considered 
whether any organizational conflict of interest (OCI) existed with 
regard to the GEMINI Team.  He concluded that there was no OCI 
because, as the solicitation's transmission letter explained, the 
project paper which led to the SOW was prepared by AID staff.  While 
the staff drew, in part, upon earlier analyses conducted by several 
U.S. and Ugandan private sector firms, the project paper was neither a 
sum total of the contents of those earlier analyses, nor did it 
represent any one firm's control over the project design.  In 
addition, the solicitation focuses on results to be achieved and 
leaves considerable freedom to offerors in determining the means 
necessary to achieve those results.  The solicitation included the 
project paper as an attachment.

On March 18, 1996, AID issued this solicitation requesting offers to 
implement the PRESTO Project under a performance-based, firm, 
fixed-price contract.  As reflected in the project paper, the contract 
would consist of three components:  microenterprise interventions, 
business associations initiative, and policy and regulatory reform.  
Under the microenterprise interventions component, the only component 
at issue here,[2] the contractor was to establish and operate a Center 
for Microenterprise Finance (CMF), under which it was to implement 
three activities:  an Institutional Capacity Enhancement Program 
(ICEP) to serve as a national clearinghouse of information and 
expertise for microenterprise finance; a Financial Services Grant 
Program (FSGP) to provide operational support and loan capital to 
banks, nongovernmental organizations, and other viable financial 
intermediaries; and a Subsector Technology Innovation Grants Program 
(STIG) to improve technology and skills of microentrepreneurs in 
selected sub-sectors with strong growth potential.  

After pointing out that the appended project paper laid out the 
project designers' approach to the Project, the RFP cautioned offerors 
not to treat the paper's specification of project activities and input 
as solicitation requirements, but to propose their own technical 
approach and required inputs based on their assessment of how the 
specified results could be best achieved with the available resources.  
Accordingly, the SOW's requirements are extremely general, and the 
milestones set forth are "illustrative only"; offerors are required to 
propose their own milestones to be substituted for the illustrative 
milestones in the eventual contract, and to propose their own payment 
schedules and anticipated results.  Award would be made to the 
responsible offeror whose proposal was most advantageous to the 
government, considering an evaluation of technical and price criteria.  
Shortly before the May 17 closing date for receipt of proposals, 
Daniel Eke filed this protest.

Daniel Eke contends that DAI has gained an unfair competitive 
advantage by virtue of its work on the concept paper and should be 
excluded from the competition.  The protester primarily asserts that 
similarities between the concept paper and the SOW show that the 
concept paper led directly, predictably, and without delay to the work 
statement, and that DAI's work on the concept paper under the GEMINI 
contract garnered it "special insights" which constitute an unfair 
competitive advantage.

ANALYSIS

The FAR sets forth both general and specific instructions on 
organizational and consultant conflicts of interest in subpart 9.5.  
The FAR generally requires contracting officials to avoid, neutralize 
or mitigate potential significant conflicts of interest so as to 
prevent unfair competitive advantage or the existence of conflicting 
roles that might impair a contractor's objectivity.  FAR  sec.  9.501, 
9.504, and 9.505.  Specifically, the FAR requires that if a 
contractor:  (1) "prepares, or assists in preparing, a work statement 
to be used in competitively acquiring a system or services," or (2) 
"provides material leading directly, predictably, and without delay to 
such a work statement," the contractor may not supply the system or 
services except in certain limited situations.  FAR  sec.  9.505-2(b)(1); 
GIC Agricultural Group, 72 Comp. Gen. 14 (1992), 92-2 CPD  para.  263.

The FAR's restriction on permitting contractors to provide systems or 
services in cases where a contractor has assisted the government in 
defining its requirements is intended to:  (1) avoid the possibility 
of bias in situations where a contractor will be in a position to 
favor its own capabilities, see FAR  sec.  9.505(a); or (2) avoid the 
possibility that the contractor, by virtue of its special knowledge of 
the agency's future requirements, would have an unfair advantage in 
the competition for those requirements.  FAR  sec.  9.505(b); see also 
Person-System Integration, Ltd., B-243927.4, June 30, 1992, 92-1 CPD  para.  
546.  With respect to unfair advantage, the FAR states that such 
advantage exists where a contractor possesses source selection 
information relevant to the contract but not available to all 
offerors.  FAR  sec.  9.505(b)(2).

The responsibility for identifying and resolving conflicts of interest 
is that of the contracting officer, who, in doing so, is admonished to 
exercise "common sense, good judgment and sound discretion."  FAR  sec.  
9.504, 9.505.  We will not disturb a contracting officer's 
determination regarding a conflict of interest unless it is shown to 
be unreasonable.  Abt Assocs., Inc., B-253220.2, Oct. 6, 1993, 93-2 
CPD  para.  269.

After reviewing the record, we find reasonable AID's determination 
that DAI did not have an OCI or unfair competitive advantage here.  
The record shows that the concept paper did not lead directly, 
predictably, and without delay to the solicitation's work statement.  
As discussed above, AID personnel attest that they wrote the SOW 
relying exclusively on the project paper.  They also attest that they 
completed the project paper long before they received the concept 
paper, which, again, concerned only one of the three components of the 
PRESTO Project.  AID personnel state that, in writing the project 
paper, they did adopt certain broad and generic ideas which evolved 
from the GEMINI Team's work in Uganda.  Specifically, the idea that 
the Project would issue grants to private voluntary organizations and 
provide technical assistance to micro-finance institutions was 
developed during this period.  However, AID asserts, and the protester 
does not dispute, that such generalized notions as grants and 
technical assistance are not unique to microfinance development 
projects.

While both the concept paper and the SOW require the implementation of 
the CMF, ICEP, and FSG, AID personnel state that they coined two of 
these three program names during the GEMINI Team's stay in Uganda, and 
that, in any case, the names are not exclusive and are attached to 
basic building block interventions widely accepted and used in the 
microfinance sector.  Our review of both documents shows that the few 
similarities between the two are those inherent in any economic 
development project of this nature, and that the two documents' 
approaches to the programs are quite different.  For example, the 
SOW's requirements for the ICEP are limited to the provision of 
expertise and information via an interactive computer link and a 
literature library, and the offeror is to determine further details on 
how best to provide these services.  While the concept paper's notion 
of the ICEP also includes on-line access to information and a 
literature library, elements to be expected in any program to 
disseminate information, it emphasizes an in-person approach to the 
program, such as having resident technical advisors, meeting space, 
training seminars, educational and social events, exchange programs, 
and site visits.  In addition, the SOW's provisions for the FSGP 
merely require the contractor to choose grant selection criteria 
acceptable to AID, in contrast with the concept paper's mandate that 
grants be evaluated under specifically defined criteria.  Finally, 
while the protester makes much of the fact that some of the milestones 
in the RFP are listed as suggested services in the concept paper, 
again, the RFP's milestones are illustrative only and are to be 
replaced with each offeror's milestones.  In any event, to the extent 
that any information in the concept paper would have provided DAI with 
an unfair competitive advantage, such advantage was eliminated by the 
fact that the paper is a publicly available document.  See GIC 
Agricultural Group, supra (where contracting officer could have 
reduced OCI by providing a copy of the project paper to the other 
offerors). 

In a related argument, Daniel Eke asserts that DAI obtained "special 
insights" into the Project by virtue of its presence during interviews 
with various businesspeople, nongovernmental organization personnel, 
and government agencies in Uganda during the development of the 
concept paper under the GEMINI contract.   The protester asserts that 
these "special insights" will help DAI formulate its technical 
approach to the Project and, thus, amount to an unfair competitive 
advantage.  We disagree.  There is no evidence that these "special 
insights" were garnered by virtue of exposure to proprietary or source 
selection information, see FAR  sec.  3.104-4(j), (k); 9.505(b), but to 
factual information concerning the economic and business situation in 
Uganda.  Moreover, the mere existence of a prior or current 
contractual relationship between a contracting agency and firm does 
not create an OCI, see Optimum Technology, Inc., B-266339.2, Apr. 16, 
1996, 96-1 CPD  para.  188, and an agency is not required to compensate for 
every competitive advantage inherently gleaned by a potential 
offeror's prior performance of a particular requirement.  Versar, 
Inc., B-254464.3, Feb. 16, 1994, 94-1 CPD  para.  230.  To the extent that 
DAI's "special insights" would provide it any advantage here, there 
would be no basis to exclude it from the competition unless that 
advantage were created by an improper preference or other unfair 
action by the agency, a situation not present here.  Id.; Delta 
Oaktree Prods., B-248903, Oct. 7, 1992, 92-2 CPD  para.  230.  

The protest is denied.

Comptroller General
of the United States

1. Daniel Eke argues that seven different firms, among them, 
Development Alternatives, Inc. (DAI), were involved in the preparation 
of the concept paper.  However, the record shows that the only one of 
these firms associated with the paper was DAI, the prime contractor 
under the GEMINI contract.  As a result, Daniel Eke's allegations with 
respect to the other firms lack a valid basis, and our decision is 
limited to a discussion of DAI's involvement with the concept paper.

2. While Daniel Eke suggests that there are similarities between 
certain aspects of the concept paper and the business associations 
component of the RFP, our review of the two documents shows no 
similarities save for isolated phrases.