BNUMBER: B-274870
DATE: January 10, 1997
TITLE: Basile, Baumann, Prost & Associates, Inc.
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Matter of:Basile, Baumann, Prost & Associates, Inc.
File: B-274870
Date:January 10, 1997
Michael P. Darrow, Esq., Hillman, Brown & Darrow, P.A., for the
protester.
Edward Wasilewski, Esq., Department of the Army, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of
the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
Agency properly excluded a firm from competing under a solicitation
where the firm has an organizational conflict of interest with respect
to competing under that solicitation because it prepared the statement
of work and cost estimate which the agency used for the solicitation.
DECISION
Basile, Baumann, Prost & Associates, Inc. (Basile) protests the
elimination of its proposal from consideration under request for
proposals (RFP) No. DACW31-96-R-0028, issued by the U.S. Army Corps of
Engineers, Baltimore, Maryland District, for services to develop and
implement a private sector outreach program for the Recreational
Partnerships Initiative (RPI).
We deny the protest.
The RFP identified seven potential sites for the RPI, and requested
prices for 14 separate tasks to develop and implement the program.
The goal of RPI is to cause private developers to lease property at
selected Corps water resource projects, and to develop and operate
public recreation facilities on these properties at no cost to the
government.
In 1992, Basile was awarded contract No. DACW31-92-C-0097 by the
Corps, under which Basile assessed the potential for recreational
development at each of 460 sites, ranked the sites according to
development potential, prepared development feasibility reports for 38
of these sites, and prepared an implementation strategy for
successfully realizing the current potential for private sector
recreation development.
In 1994, the Corps considered modifying Basile's contract to include
the services solicited under the current RFP. At the request of the
contracting officer's representative (COR), Basile submitted a
proposed statement of work (SOW) and cost estimate for such a
modification. The SOW identified 25 tasks to be performed by either
the contractor or the government. The cost estimate provided the
estimated cost for each of the tasks to be performed by the
contractor--14 tasks in all--as well as for three "additional items."
The Corps determined not to modify the 1992 contract to include these
services. The COR then prepared a memorandum requesting that the
services be acquired from Basile using sole source procedures. This
memo included an SOW with the same 25 tasks identified by Basile using
Basile's SOW almost verbatim. The memo also included a government
cost estimate which stated the same estimates as Basile's estimate had
stated for 13 of 14 of the contractor's tasks and within $100 for the
remaining task. The government estimate also included the three
additional items at the same cost as estimated by Basile. A sole
source procurement was not approved.
The Corps instead determined that this need should be satisfied
through full and open competition and, on March 4, 1996, issued the
current RFP. The RFP contemplated award of a firm, fixed-price
contract. The SOW in the RFP identified the same 25 tasks almost
verbatim from Basile's earlier SOW. The schedule of prices listed 15
contract line items--one for each of the 14 tasks to be performed by
the contractor and one for total price.
A number of proposals were submitted on April 23 in response to the
RFP. The agency's technical evaluators evaluated the proposals and
determined that, although some proposals were considered technically
acceptable, only Basile submitted an "outstanding" proposal. One of
the cost evaluators determined that Basile was the only offeror that
appeared to fully understand the RFP requirements. Upon requesting
the government estimate,[1] this evaluator noticed that Basile's
proposed price was nearly identical to the government estimate. She
also noticed that Basile proposed prices for optional items which were
not in the RFP, but which were in the government estimate.
An investigation was conducted by the Army's Criminal Investigation
Command. It was determined that the COR had used Basile's SOW for the
description of the 25 tasks in the RFP's SOW, and its cost estimate
for the government cost estimate with only a minor adjustment.[2] The
contracting officer states that she was unaware when the RFP was
issued and evaluations performed that Basile had prepared the SOW and
government estimate.[3]
The contracting officer determined that, since Basile had prepared the
work statement used in this RFP, a conflict of interest existed which,
under Federal Acquisition Regulation (FAR) sec. 9.505-2(b)(1), prohibited
Basile from providing these services. She subsequently eliminated
Basile from the competition. This protest followed.
The FAR, under subpart 9.5, generally requires contracting officials
to avoid, neutralize or mitigate potential significant organizational
conflicts of interest, including precluding a particular firm from
competing, so as to prevent unfair competitive advantages, the
existence of conflicting roles that might impair a contractor's
objectivity, or the existence of biased ground rules created, whether
intentional or not, in situations where, for example, a firm writes
the statement of work or specifications. GIC Agricultural Group, 72
Comp. Gen. 14 (1992), 92-2 CPD para. 263; Aetna Government Health Plans,
Inc.; Foundation Health Fed. Servs., Inc., B-254397.15 et al., July
27, 1995, 95-2 CPD para. 129. Specifically, FAR sec. 9.505-2(b)(1) states:
"If a contractor prepares, or assists in preparing, a work
statement to be used in competitively acquiring a system or
services--or provides material leading directly, predictably, and
without delay to such a work statement--that contractor may not
supply the system, major components of the system or services
unless:
(i) It is the sole source;
(ii) It has participated in the development and design work;
or
(iii) More than one contractor has been involved in preparing
the work statement."
The responsibility for determining whether a firm has a conflict of
interest and to what extent a firm should be excluded from competition
rests with the procuring agency, and we will not overturn such a
determination unless it is shown to be unreasonable. Ressler Assocs.,
Inc., B-244110, Sept. 9, 1991, 91-2 CPD para. 230; LW Planning Group,
B-215539, Nov. 14, 1984, 84-2 CPD para. 531.
It is not disputed that Basile prepared the statement of work and
government estimate for the specific tasks which are to be performed
under this RFP. Although these documents were initially prepared for
the purpose of modifying Basile's contract, the Corps nevertheless
used this contractor-prepared work statement and cost estimate for the
subsequently issued competitive RFP.
Basile contends that its work under the 1992 contract was "development
or design work" and therefore falls under FAR sec. 9.505-2(b)(1)(ii),
quoted above, which permits award to a firm that prepared the work
statement in the RFP. The contracting officer responds that under the
1992 contract:
"[Basile] was required to evaluate lands at Corps-owned water
resources projects for the purpose of determining the suitability
of the real estate for development of public recreational
facilities by private industry. The contract did not call for
any improvement in technology, materials, processes, or method.
Accordingly, the work performed by [Basile] cannot be
characterized as 'design and development work' as those terms are
used in [FAR subpart 9.5]."
Basile has not refuted this statement. Because the contracting
officer's assessment of this issue is consistent with our prior
decisions on this FAR exception, we have no basis to find as
unreasonable her determination not to apply the exception. See GIC
Agricultural Group, supra; Ressler Assocs., Inc., supra.
Basile also contends that its proposal should not be rejected because
there is no evidence that this work gave it an unfair competitive
advantage. However, the record suggests otherwise. For instance,
prior to learning that Basile had prepared these documents, it was
determined by the technical and cost evaluators that Basile was the
only offeror to fully understand the requirements. We think this is
reasonable evidence that Basile had an inherent advantage over other
offerors which it gained from preparing the work statement and
government estimate. Ressler Assocs., Inc., supra. In any event,
when the FAR conditions defining a conflict of interest exist, the
existence of an unfair competitive advantage is assumed and a
contacting official may reasonably impose remedies prescribed under
FAR subpart 9.5. GIC Agricultural Group, supra. Since Basile
prepared the SOW and the cost estimate, the contracting officer
reasonably determined that a conflict of interest existed and
reasonably prohibited Basile from providing the services solicited
under this RFP. Id.; Ressler Assocs., Inc., supra.
The protest is denied.
Comptroller General
of the United States
f:\projects\pl\274870.wp5
1. The government estimate had not been provided to the cost
evaluators. In response to the cost evaluator's request, the COR
provided the government estimate which he had prepared for the earlier
request for a sole source procurement.
2. The investigation did not find any evidence of criminal actions.
3. While the protester disputes this statement, it has not shown the
statement was untrue.