BNUMBER:  B-272456
DATE:  October 23, 1996
TITLE:  International Management and Communications Corporation

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Matter of:International Management and Communications Corporation

File:     B-272456

Date:October 23, 1996

Jon W. van Horne, Esq., McDermott, Will & Emery, for the protester.
William T. Irelan, Esq., Freideman, Irelan, Ward & Lamberton, P.C., an 
intervenor.
Gary M. Winter, Esq., and Rumu Sarkar, Esq., United States Agency for 
International Development, for the agency.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that the contracting agency improperly selected the awardee 
despite an alleged organizational conflict of interest (based upon a 
debt owed to an affiliate) is denied where the record does not support 
this allegation.

DECISION

International Management and Communications Corporation (IMCC) 
protests the award of a contract to Credit Union National Association 
(CUNA) under request for proposals (RFP) No. 96-02, issued by the 
United States Agency for International Development (USAID) for 
technical assistance services to help revitalize Nicaragua's rural 
credit union system.  The protester contends that CUNA is ineligible 
for award due to an improper organizational conflict of interest 
stemming from a debt owed by a recipient of services under the 
contract to an affiliate of the contractor.

We deny the protest.

USAID's Rural Credit Unions Program (RCUP) in Nicaragua aims to 
increase access to financial services for small savers and producers 
in and around market towns.  The contractor, under the terms of the 
RFP, will provide technical assistance services to help credit unions 
and national credit union associations develop and market attractive 
financial services; the RFP's RCUP program provides for a 5-year 
period of restructuring and modernizing two national credit union 
associations and approximately 28 rural credit unions.  The RFP 
provides that the contractor will evaluate potential recipients of the 
available assistance and make its recommendations to USAID for 
approval.

Two proposals, IMCC's and CUNA's, were received in response to the RFP 
and were evaluated.  After holding discussions with both offerors and 
evaluating their best and final offers, USAID awarded the contract to 
CUNA on June 19, 1996.  This protest followed.

IMCC contends that CUNA, acting as the contracting agent for the World 
Council of Credit Unions (WOCCU), should be found ineligible for award 
due to an improper organizational conflict of interest.[1]  IMCC 
states that the Latin American Confederation of Credit Unions (COLAC), 
which is a member of WOCCU, is owed a debt (of approximately $200,000) 
from the Federacion de Cooperativas de Ahorroy Credito (FECACNIC), one 
of the national credit union associations in Nicaragua that will 
receive advice and assistance under the contract.  The protester 
contends that WOCCU's interest in promoting repayment of the debt owed 
to WOCCU's member, COLAC, will improperly influence the performance of 
the contract.[2]  Citing the FECACNIC debt to COLAC, and maintaining 
that the debt is materially related to the awardee's performance of 
the contract due to WOCCU's membership relationship with COLAC and 
WOCCU's provision of assistance to FECACNIC under the contract, IMCC 
contends that WOCCU should be precluded from receiving the award and 
that the agency acted unreasonably in failing to exclude WOCCU from 
the competition.[3]

An organizational conflict of interest occurs where, because of other 
activities or relationships with other persons, a person is unable or 
potentially unable to render impartial assistance or advice to the 
government, or the person's objectivity in performing the contract 
work is or might be otherwise impaired, or a person has an unfair 
competitive advantage.  Federal Acquisition Regulation (FAR)  sec.  9.501.  
Contracting officials are 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.  9.504(a); CH2M Hill, Ltd., B-259511 
et al., Apr. 6, 1995, 95-1 CPD  para.  203.  The responsibility for 
determining whether an actual or apparent conflict of interest will 
arise, and to what extent the firm should be excluded from the 
competition, rests with the contracting agency.  We will not overturn 
the agency's determination in this regard except where it is shown to 
be unreasonable.  SRS Technologies, B-258170.3, 
Feb. 21, 1995, 95-1 CPD  para.  95.  

USAID reports that WOCCU certified in its proposal that no known 
organizational conflict of interest existed, and that the agency had 
no reason to question the alleged debt-related organizational conflict 
of interest prior to making the award.  The agency states that after 
IMCC brought its post-award challenge, USAID reviewed the protester's 
conflict allegation.  The agency concluded that there was no apparent 
conflict of interest that would improperly influence WOCCU's 
performance of the contract.  Specifically, USAID found that the 
challenged debt was not owed to the contractor itself (the extended 
relationship described by the protester between the parties to the 
debt and the contractor was found by USAID to be too attenuated to 
constitute an improper conflict), the limited assistance to be 
provided by WOCCU to FECACNIC was determined by USAID, the contract 
does not include direct financial assistance from the contractor, and 
WOCCU would not be controlling program resources since the awardee 
would only be recommending program recipients for agency approval.

Our review of the record does not support the protester's contention 
that the agency acted unreasonably in awarding the contract to WOCCU 
despite the debt owed by FECACNIC to COLAC.  The relationship 
described by the protester in its effort to tie the existing debt to 
WOCCU's performance of the contract is too indirect; in other words, 
there is no direct means or basis for WOCCU to benefit FECACNIC 
financially for purposes of repayment of its debt.  Under this 
contract, USAID will approve the actual credit union recipients of 
services under the contract recommended by the contractor, and WOCCU 
will then provide the recipients with assistance--primarily limited 
technical assistance (management, facility, and training support).  
The protester has not shown that FECACNIC's debt to COLAC could 
reasonably be expected to influence WOCCU's performance of the 
contract or impair its objectivity.   Given that WOCCU has no direct 
involvement with the debt in question, WOCCU's relationship to 
FECACNIC under the contract is defined by USAID, the beneficiaries of 
assistance are ultimately chosen by USAID, and the assistance to be 
given by WOCCU is not financial; we agree with the agency that award 
to WOCCU does not present an organizational conflict of interest.[4]

The protest is denied.

Comptroller General
of the United States

1. Hereafter, we refer only to WOCCU as the contractor, although CUNA 
acted as the contracting agent.

2. Specifically, IMCC states the following in its July 3 protest:

            " . . . CUNA/WOCCU will be working closely with . . . 
            FECACNIC . . . [a debtor] to COLAC, an organization 
            affiliated with CUNA/WOCCU.  WOCCU has an unavoidable 
            interest in promoting the repayment of the overdue debts 
            owed to COLAC.  This could directly influence the advice 
            given to . . . FECACNIC, the selection with . . . FECACNIC 
            of individual credit unions to participate in the program 
            and the qualification of the individual credit unions for 
            grants and access to the USAID-managed funds.  WOCCU would 
            be influenced to select credit unions that are currently 
            members of FECACNIC for the Project.  WOCCU would also be 
            influenced to select credit unions that would be willing 
            to purchase services from FECACNIC, which in turn would 
            make FECACNIC more likely to be able to repay the loans 
            owed to WOCCU's affiliated member organization, COLAC.  
            Individual credit unions unwilling to participate with 
            FECACNIC or possibly to choose to work with FECACNIC . . . 
            could be prejudiced from WOCCU's management of the 
            program, to the overall detriment of the USAID and its 
            Rural Credit Union Project."

In its protest, IMCC also alleged that a debt owed to COLAC by 
Fundacion Nicaraguense de Desarrollo (FUNDE), another national credit 
union association to be provided assistance under the contract, 
creates a similar conflict of interest for CUNA/WOCCU.  In its 
comments responding to the agency's report on the protest, however, 
IMCC failed to discuss the alleged FUNDE debt or that debt's role in 
the protest; we therefore consider this protest allegation abandoned.  
See Scott & Sons Maintenance, Inc., B-255328.2, Mar. 14, 1994, 94-1 
CPD  para.  200.

3. IMCC also protests that an improper organizational conflict of 
interest exists in that the RFP provides that WOCCU's credit rating 
system is considered acceptable for use under the contract.  According 
to IMCC, the awardee will not objectively or independently evaluate 
other available credit rating systems prior to deciding which system 
to implement since it will probably choose its own approved system.  
The RFP, however, in permitting WOCCU to choose and implement the 
approved WOCCU rating system, does not require, as alleged by the 
protester, an "objective" assessment by the contractor of all 
available rating systems.

4. In its August 29 comments on the agency report, IMCC argues for the 
first time that the "essence" of its protest is that since WOCCU is a 
membership-for-fee organization, there is an inherent conflict of 
interest in the firm's performance of the contract since it is at odds 
with WOCCU's basic mission to benefit its members over non-members.  
In this regard, IMCC also states in its comments for the first time 
that the protested debt relationship is merely illustrative of a 
broader, more persuasive conflict due to WOCCU's overall commitment to 
and dependence on the international credit union federation hierarchy.  
The protester, in its August 29 comments, also challenges certain 
alleged past performance problems of WOCCU and WOCCU's alleged faulty 
hierarchical approach to the provision of services under the contract.  
These contentions, however, were not raised in IMCC's initial protest, 
which focused solely on the challenged debt relationship and choice of 
credit rating system as the bases for the alleged organizational 
conflict of interest; the protest did not state that these specific 
bases of conflict were merely examples of the conflict now challenged 
by IMCC.  The record shows that the information relied upon by IMCC in 
raising these new protest allegations was known by IMCC (through the 
personal knowledge of its proposed Chief of Party) or should have been 
known (through its access to the public information provided in its 
comments) earlier than 14 calendar days prior to the filing of its 
August 29 comments.  These protest allegations are untimely filed and 
thus not proper for our consideration.  4 C.F.R. sec.  21.2(a)(2) (1996).