BNUMBER:  B-272168
DATE:  September 4, 1996
TITLE:  The Law Offices of George E. Hill

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Matter of:The Law Offices of George E. Hill

File:     B-272168

Date:September 4, 1996

James P. Ray, Esq., Robinson & Cole, for the protester.
Hughes Griffis, Esq., Waller, Smith & Palmer, an intervenor.
Richard E. Weston, Department of Housing and Urban Development, for 
the agency.
Andrew T. Pogany, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting agency properly awarded real estate property closing 
services contract to law firm offeror where offeror did not 
intentionally misrepresent or omit information about its prior 
representation of major real estate lenders in its proposal, the 
solicitation did not require the listing of these clients, and where 
the record shows that the offeror's listing of these alleged client 
conflicts would not have altered the agency's award decision.

DECISION

The Law Offices of George E. Hill protests the award of a contract to 
Waller,   Smith & Palmer, a law firm, under request for proposals 
(RFP)                         No. H01R96000100000, issued by the 
Department of Housing and Urban Development (HUD) as a small business 
set-aside to provide real estate property closing services in 
connection with the sale of HUD-acquired defaulted family properties 
in Connecticut.  Hill alleges that Waller has had lawyer-client 
relationships with several major Federal Housing Administration (FHA) 
lenders in Connecticut that Waller did not disclose in its proposal 
and that present "a substantial organizational conflict [which 
prevents the firm from rendering objective advice to HUD] and that 
should lead to the firm's disqualification." 

We deny the protest.

The RFP, issued February 20, 1996, contemplated multiple awards of 
indefinite quantity contracts for a base period and 2 option years 
with services secured by issuance of task orders.[1]  The RFP required 
offerors to propose fixed-unit prices per sale closed.  The RFP stated 
that the government would make award to the responsible offeror 
submitting the conforming, low-priced technically acceptable offer.  
The RFP contained the following technical evaluation criteria which 
offerors had to meet to be considered technically acceptable:  (1) 
general experience and qualifications of the offeror; (2) ability to 
establish offices reasonably located in the service area and with 
adequate resources; and (3) a management plan that reflects the 
offeror's ability to perform requirements, including the management of 
staff and subcontractors and the "management of cases in which a 
conflict of interest [has] been identified," as well as a quality 
control plan.  The RFP stated that the government would evaluate 
prices by multiplying the unit prices for each performance period by 
an estimated minimum number of stated closings and that the price for 
each period would be added together to obtain a total evaluated price.

The RFP included in Section L the provision at HUD Acquisition 
Regulation (HUDAR) L.1 (1995), "Organizational Conflicts of Interest 
Notification (FEB 1987)," which provided, in relevant part, as 
follows:

         "(a) It is the [HUD] policy to avoid situations which place 
        an offeror in a position where its judgment may be biased 
        because of any past, present, or currently planned interest, 
        financial or otherwise, that the offeror may have which 
        relates to the work to be performed pursuant to this 
        solicitation or where the offeror's performance of such work 
        may provide it with an unfair competitive advantage.

        "(b) Offerors shall provide a statement which describes in a 
        concise manner all relevant facts concerning any past, present 
        or currently planned interest (financial, contractual, 
        organizational, or otherwise) relating to the work to be 
        performed . . . [bearing on whether the offeror can render 
        objective advice and whether it would receive an unfair 
        competitive advantage].

        "(c) In the absence of any relevant interests referred to 
        above, the offeror shall complete the certification at [HUDAR   sec.  
        2452.209-71], Organizational Conflicts of Interest 
        Certification.

                    .     .     .     .     .

        "(f) If the [c]ontracting [o]fficer determines that a 
        potential conflict exists, the selected offeror shall not 
        receive an award unless the conflict can be avoided or 
        otherwise resolved through the inclusion of a special contract 
        clause or other appropriate means. . . ."

The agency states that because it determined that typically all firms 
that would submit proposals under this solicitation were likely to 
have contractual relations with FHA lenders and other mortgage 
companies, it included the following contract clause to neutralize and 
mitigate such possible conflicts of interest:

        "H.10  Conflict of Interest

        "The Contractor shall not be permitted to directly perform 
        work on any case for which there may be a conflict of 
        interest.  A conflict of interest may arise if the Contractor 
        performed work or was involved in the legal work related to 
        the foreclosure action which resulted in HUD's acquisition of 
        a property which may be assigned to the Contractor under this 
        contract for either review of title evidence received by HUD 
        upon its acquisition of the property or an examination of the 
        title beginning with the date of HUD's acquisition.  The fact 
        that a conflict of interest may occur does not relieve the 
        contractor from the responsibility of ensuring that the 
        services requested are performed in accordance with the 
        contract requirements; the Contractor shall have an acceptable 
        method in place of identifying potential conflicts of interest 
        and ensuring that the work they are precluded from 
        accomplishing themselves is accomplished as required."

Twelve proposals were received by the closing date of March 21.[2]  
The proposals of Waller and Hill were found to be technically 
acceptable.  Waller's total evaluated price was $520,000; Hill's 
evaluated price was $712,200.  The agency awarded the contract to 
Waller.  This protest followed.[3]

The protester simply argues that Waller has represented numerous major 
mortgage lenders in the past and has "substantial relationships with 
many of the top mortgage lenders in the State."  The protester faults 
Waller for not listing each lender in its proposal and thereby fully 
disclosing its prior legal representation of major lending companies.  
The protester argues that this "nondisclosure" by Waller requires that 
Waller be disqualified from receiving the award.

The agency points out that Waller submitted a detailed conflict 
avoidance plan in its proposal which stated in part:

        "Each time a file is opened, a conflict check is run by 
        computer in order to avoid any conflicting representation. . . 
        . Should the routine conflict check reveal that the purchaser 
        of a parcel owned by HUD is a former or present client of 
        [Waller], a letter shall be forwarded to said client 
        indicating that with respect to this transaction [Waller] 
        represents the Seller (HUD) and therefore cannot represent his 
        interests at closing.  In some cases, such a present or former 
        client will be asked at closing to sign a document 
        acknowledging that [Waller] did not represent their interest."

The agency stands by its selection of Waller despite the contentions 
of the protester.

Generally, where an offeror has made an intentional misrepresentation 
that materially influenced the agency's consideration of its proposal, 
the proposal should be disqualified and a contract award based upon 
the proposal canceled.  Gold Appraisal Co., B-259201, Mar. 15, 1995, 
95-1 CPD  para.  144.  However, even where our Office determines that a 
misrepresentation was intentional, we will not find an offeror 
ineligible for award where the correct representation reasonably would 
not alter the agency's award decision and the misrepresentation was 
not made in bad faith.  See Gold Appraisal Co., supra.

This protest requesting the disqualification of Waller is without 
merit for the following reasons.  First, there is no evidence of any 
intentional misrepresentation, bad faith, or nondisclosure by Waller 
concerning its business relationships or prior clients.  We do not 
read the RFP to require the Waller law firm and other offerors to list 
all previous major lenders for which the firm or firms had provided 
legal services.  In fact, as HUD reasonably concluded, the Waller 
proposal presented a comprehensive and effective plan for the 
avoidance of any conflicts during contract performance.  Second, the 
agency was fully made aware (at the latest during the pendency of this 
protest) of the potential for any conflicts by Waller and has affirmed 
its decision that Waller's plan to avoid any conflicts was acceptable 
and to select Waller for award.  While the protester argues that the 
awardee's representation of FHA mortgage lenders and the awardee's 
role as a HUD closing agent creates an impermissible conflict of 
interest, as stated above, HUD anticipated that offerors would likely 
have relationships with mortgage companies and other lenders and 
included H.10 to provide for neutralizing/mitigating such possible 
conflicts of interest.  Here, the awardee's proposal listed the names 
of the FHA mortgage lenders which the firm has represented in the 
closing process and its proposed conflict avoidance plan states that 
it will identify potential conflicts, limit its representation to HUD 
as HUD's closing agent and so advise the former client of its position 
so that the former client can obtain its own independent counsel for 
the closing.  We have no basis to question HUD's determination that 
this arrangement will avoid or mitigate any potential conflict of 
interest.  See Gold Appraisal Co., supra.  Moreover, we simply note 
that the Waller law firm can recuse itself where a serious conflict is 
present to avoid any contract performance problems.
       
The protest is denied.[4]

Comptroller General
of the United States

1. The multiple award provision was required because the agency 
anticipated awarding contracts for these services in five separate New 
England states.  Only the award of the Connecticut contract is at 
issue here.

2. We limit our discussion to the proposals of Hill and Waller.

3. In its comments on the agency report, filed more than 14 days after 
its receipt of that report, the protester complains that the 
contracting officer failed to provide pre-award notice of the intended 
awardee as generally required in small business set-asides.  This 
matter is untimely.  See 4 C.F.R.  sec.  21.2(a)(2) (1996).  

4. The protester also alleges that a HUD employee had been previously 
represented by Waller at a closing.  The record shows that this 
employee had no part in the procurement.  The protester makes similar 
allegations about another employee of HUD for the purpose of 
permitting HUD to take "measures [to avoid] any future problems."  We 
think this allegation concerns a matter of contract administration and 
is not for our review.  See 4 C.F.R.  sec.  21.5(a).