BNUMBER:  B-276634 
DATE:  July 7, 1997
TITLE: Epoch Engineering, Inc., B-276634, July 7, 1997
**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:Epoch Engineering, Inc.

File:     B-276634

Date:July 7, 1997

Michael W. Kauffman, Esq., Shulman, Rogers, Gandal, Pordy & Ecker, 
P.A., for the protester.
Devon E. Hewitt, Esq., and Matthew A. Anzaldi, Esq., Shaw, Pittman, 
Potts & Trowbridge, for Applied Measurement Systems, Inc., an 
intervenor.
Chris Hagberg, Esq., and Stephen H. S. Tryon, Esq., Department of the 
Navy, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

The contracting agency reasonably determined that the awardee's 
conflict of interest mitigation plan adequately avoided or mitigated 
potential conflicts that might arise if one of the awardee's proposed 
subcontractors were tasked to do work under particular delivery orders 
to be issued under an indefinite delivery/ indefinite quantity 
contract for engineering and technical support services where: (1) the 
awardee's proposed conflict mitigation plan included a number of 
safeguards designed to detect potential conflicts and to assign work 
under those task orders to the prime and/or another subcontractor; and 
(2) the awardee has proposed more than enough qualified professional 
personnel who are not employed by the subcontractor with potential 
conflicts so that the awardee can successfully avoid conflicts and 
still perform the full scope of work contemplated by the solicitation.

DECISION

Epoch Engineering, Inc. protests the Naval Surface Warfare Center's 
award of an indefinite delivery/indefinite quantity, 
cost-plus-fixed-fee contract for engineering and technical support 
services to Applied Measurement Systems, Inc. (AMSI) pursuant to 
request for proposals (RFP) No. N00167-95-R-0128.  Epoch contends that 
AMSI is ineligible for award under the express provisions of the RFP 
because one of AMSI's proposed subcontractors has an unavoidable 
organizational conflict of interest.  Epoch also contends that the 
Navy unreasonably failed to consider the effect of AMSI's proposed 
organizational conflict of interest mitigation plan in its 
technical/management evaluation of AMSI's proposal.[1]

We deny the protest.

Issued on January 24, 1996, the RFP solicited offers to provide 
engineering and technical support services for submarine and surface 
ship acoustical trials for a period of 5 years.  The RFP called for 
the contractor to perform various tasks in response to individual 
delivery orders issued by the Navy over the course of the contract.  
The RFP's statement of work (SOW) listed 11 different categories in 
which work would be performed as follows:  (1) submarine and surface 
ship noise source localization and analysis; (2) submarine silencing 
effectiveness; (3) transient noise studies; (4) own ship radiated 
noise monitoring; (5) data analysis and studies in support of the 
Submarine Maintenance Monitoring Support Office and the Shore 
Intermediate Maintenance Activity; (6) submarine silencing development 
and design studies; (7) submarine detection and detectability studies; 
(8) acoustic measurement and data acquisition system development; (9) 
database management system development and maintenance; (10) low 
frequency submarine target strength studies and analysis; and (11) 
acoustic trial direction support.  

The RFP indicated that the contract would be awarded to the offeror 
whose offer was determined to be most advantageous to the government 
after evaluation of technical/management factors and cost.  The RFP 
stated that the technical/ management factors were more important than 
cost.  The technical/management factors were listed, in descending 
order of importance, as follows:  personnel; corporate experience; 
technical understanding; management plan; and facilities. 

The RFP included an organizational conflict of interest clause which 
stated, in pertinent part:

     "This clause provides examples of certain organizational 
     conflicts of interest which are prescribed by Federal Acquisition 
     Regulation Subpart 9.5.  The two underlying principles which this 
     clause seeks to avoid are preventing the existence of conflicting 
     roles that might bias a contractor's judgement and preventing 
     unfair competitive advantage.  The following subsections 
     prescribe certain limitations on contracting as the means of 
     avoiding, neutralizing, or mitigating organizational conflicts of 
     interest.
                         .    .    .    .    . 

     (d) The Contracting Officer has determined that, in performance 
     of this contract, the contractor will be required to provide 
     technical evaluation of various contractor's offers and products.  
     Contracts involving (a) technical evaluations of contractor's 
     offers or products or (b) consulting services shall not be 
     awarded to a contractor that would advise the Government 
     concerning its own products or activities or those of a 
     competitor without proper safeguards.  Therefore, Contractors or 
     Subcontractors that have detail design and/or construction 
     contracts with the Government which are directly involved with 
     producing current nuclear attack submarines, surface combatants 
     and/or advanced naval vehicles which may be subject to technical 
     evaluation under this contract, shall not be eligible for award 
     of this contract, as such contractors have an unavoidable 
     conflict of interest."

The Navy clarified its position regarding organizational conflicts of 
interest by issuing amendment 0001 to the RFP which stated:

     "This amendment is being issued in response to an offeror's 
     question concerning the Organizational Conflict of Interest 
     Clause (OCI).  The Government does not intend to delete the OCI 
     Clause from the subject solicitation.  Those offerors who feel 
     performance of work under the contract may cause a conflict of 
     interest, of the kind contemplated by the clause, should address 
     the issue in their proposal and should include their plan to 
     mitigate the conflict of interest.  The Government will then 
     evaluate the mitigation plan and may grant a waiver to the clause 
     if the mitigation plan is determined to be acceptable."

In addition, in response to offerors' further questions concerning the 
conflict of interest provisions, the Navy issued amendment 0002 to the 
RFP which stated in pertinent part:

     "Question:  What criteria will be used to evaluate the 
     acceptability of [organizational conflict of interest] mitigation 
     plans?  Answer:  The Government will evaluate an offeror's plan 
     to mitigate a potential organizational conflict of interest on 
     the basis of the following criteria:  Does the proposed plan 
     mitigate the potential conflict of interest such that the full 
     scope of work contemplated by this solicitation can be performed 
     by the offeror?" 

Only AMSI and Epoch submitted proposals.  After initial proposals were 
evaluated, discussions were held with both offerors.  Both offerors 
submitted best and final offers (BAFO) by the February 28, 1997, 
closing date.  Evaluation of BAFOs resulted in AMSI's BAFO receiving a 
total score of [deleted] technical/management points (approximately 
[deleted] percent of the total points available) and Epoch's BAFO 
receiving a total score of [deleted] technical/management points 
(approximately [deleted] percent of the total points available).  
AMSI's total proposed BAFO price was [deleted], and Epoch's total 
proposed BAFO price was [deleted].  The contracting officer determined 
that AMSI's BAFO represented the best value to the government, because 
[deleted] AMSI's total proposed price represented a savings of roughly 
[deleted].  Therefore, the Navy awarded the contract to AMSI on March 
24.  After a debriefing conference, Epoch filed this protest in our 
Office. 

Epoch contends that AMSI is ineligible for award because one of AMSI's 
proposed subcontractors, [deleted], has an unavoidable conflict of 
interest because it is a shipbuilder.[2]  Epoch believes that 
[deleted] might be called upon, in its capacity as a subcontractor to 
AMSI, to evaluate nuclear attack submarines, surface combatants, or 
advanced naval vehicles that it, or one of its competitors, has built 
for the Navy in the past or will build for the Navy over the 5-year 
period of AMSI's engineering and technical support services contract.  
Epoch argues that because nearly all of the RFP's requirements are 
linked to the quality of construction or design of nuclear attack 
submarines, surface combatants, or advanced naval vehicles, [deleted] 
objectivity may be impaired when providing engineering and technical 
support services relating to locating the source of, analyzing, and 
reporting on noise detected during acoustic trials.[3]   Thus, Epoch 
argues that the Navy's finding that AMSI's organizational conflict of 
interest mitigation plan was acceptable lacked a rational basis.  
Epoch also contends that the Navy should have considered AMSI's 
proposed conflict mitigation plan and downgraded AMSI's proposal on 
the personnel and corporate experience factors because the mitigation 
plan prevents AMSI from using [deleted] for work on delivery orders 
for which [deleted] has a conflict.

A contracting officer is required to avoid, neutralize, or mitigate a 
significant potential organizational conflict of interest on the part 
of a prospective contractor before award.  Federal Acquisition 
Regulation (FAR)  sec.  9.504(a)(2), 9.505; D.K. Shifflet & Assocs., Ltd., 
B-234251, May 2, 1989, 89-1 CPD  para.  419 at 4-5.  Because conflicts may 
arise in factual situations not expressly described in the relevant 
FAR sections, the regulation advises contracting officers to examine 
each situation individually and to exercise "common sense, good 
judgment, and sound discretion" in assessing whether a significant 
potential conflict exists and in developing appropriate ways to 
resolve it.  FAR  sec.  9-505; SC&A, Inc., B-270160.2, Apr. 10, 1996, 96-1 
CPD  para.  197 at 9.  The responsibility for determining whether an actual 
or apparent conflict of interest will arise if a particular firm is 
awarded a contract, and to what extent the firm should be excluded 
from the competition, rests with the contracting agency; we will not 
overturn the agency's judgment in this regard unless it is shown to be 
unreasonable.  D.K. Shifflet & Assocs., Ltd., supra, at 5; SC&A, Inc., 
supra, at 9. 

AMSI proposed a contracting team consisting of itself and two 
subcontractors, [deleted].[4]  AMSI's proposed conflict of interest 
mitigation plan stated that AMSI itself had no known conflicts since 
it had no detailed design and/or construction contracts involving the 
production of nuclear attack submarines, surface combatants, or 
advanced naval vehicles that might be evaluated under the contract.  
While AMSI's conflict mitigation plan acknowledged the possibility 
that a proposed subcontractor might have a conflict related to an 
individual delivery order, the plan stated that the work on that 
delivery order would be performed by AMSI and/or the other 
subcontractor on the team.  

The contracting officer states that she was favorably impressed with 
the detailed plan AMSI proposed for reviewing delivery order SOWs in 
order to mitigate potential conflicts that might arise.  The 
contracting officer also states that she reviewed AMSI's staffing plan 
in conjunction with the conflict mitigation plan and was convinced 
that AMSI had a sufficient number of qualified personnel who were 
employed by either AMSI or [deleted] to enable the AMSI team to 
perform all of the work required under any particular delivery order 
on which [deleted] might have a conflict without using any [deleted] 
employees.  The contracting officer also indicates her opinion that 
the AMSI mitigation plan would adequately avoid having work performed 
by employees of a firm that had a conflict was supported by the fact 
that the Navy evaluators, although aware of the issue, had not raised 
any concerns about AMSI's approach to mitigating conflicts during 
their technical/ management or cost evaluations.[5]  Accordingly, the 
contracting officer states that she considered the AMSI conflict 
mitigation plan to have met the agency's standard, as set forth in 
amendment 0002, for acceptability--i.e., the plan would mitigate any 
conflicts so as to allow the offeror to perform the full scope of work 
required under the contract.

AMSI's detailed conflict mitigation plan included several features 
designed to protect the Navy from conflicts that might arise under 
specific delivery orders. Under the plan, AMSI and each of its 
subcontractors [deleted].  

Both the contracting officer and the chairman of the technical 
evaluation board report that they believed that AMSI's conflict 
mitigation plan would work because AMSI would [deleted].
  
In our opinion, the Navy reasonably determined that AMSI's proposed 
conflict of interest mitigation plan was adequate.  The plan, as 
described above, included a number of built-in safeguards to avoid 
assigning work to a firm with a conflict of interest, including 
[deleted].[6]  

Additionally, in view of the large number of proposed key and non-key 
personnel that are not employed by [deleted], we think that the Navy 
reasonably concluded that AMSI could successfully avoid conflicts by 
assigning work to the corporate member(s) of the AMSI team that did 
not have a conflict.  In this regard, we note, as did the Navy, that 
for the 43 required positions, [deleted].  Thus, AMSI could cover 
approximately [deleted] of the required positions using only its own 
or [deleted] employees.  In view of the fact that AMSI's proposed 
conflict of interest mitigation plan contained [deleted] safeguards 
[deleted] to detect and mitigate conflicts if they occur, and because 
AMSI proposed more than enough qualified personnel and, therefore, was 
not dependent upon [deleted] to do work in any professional labor 
category, we conclude that the Navy reasonably determined that AMSI's 
mitigation plan was acceptable.  See Research Analysis and 
Maintenance, Inc., B-272261; B-272261.2, Sept. 18, 1996, 96-2 CPD  para.  
131 at 12; D.K. Shifflet & Assocs., Ltd., supra, at 5. 
 
Concerning the allegation that the Navy improperly did not consider 
the effects of AMSI's proposed conflict mitigation plan in its 
technical/management evaluation, we find nothing improper in the 
Navy's failing to downgrade AMSI's proposal when evaluating the 
personnel and corporate experience factors.  As noted above, the RFP 
stated that proposals would be evaluated on personnel, corporate 
experience, technical understanding, management plan, and facilities 
factors.  The RFP included a very detailed discussion about how the 
Navy would evaluate each of those factors.  Conspicuously absent from 
the RFP's discussion is any indication that the technical/management 
evaluation would consider the effects, if any, of an offeror's 
conflict mitigation plan.  Moreover, when the Navy amended the RFP to 
clarify its position regarding conflicts of interest, the evaluation 
scheme was not altered to include a technical/management evaluation of 
proposed conflict mitigation plans.  In fact, amendment 0002, quoted 
above, expresses the only standard for review of the acceptability of 
conflict mitigation plans when it states that the Navy will review 
organizational conflict of interest mitigation plans to determine 
whether the full scope of work contemplated by this solicitation can 
be performed by the offeror.  As described in full above, the Navy's 
review and acceptance of AMSI's organizational conflict of interest 
mitigation plan was fully consistent with that standard.  In any 
event, it is clear that the contracting officer reviewed the 
mitigation plan in the context of AMSI's approach to performing the 
work and its proposed staffing, and concluded, reasonably in our view, 
that there was no reason to downgrade AMSI's proposal.

The protest is denied.

Comptroller General
of the United States

1. Epoch also alleged in its initial protest letter that the Navy 
deviated from the RFP's stated evaluation criteria in evaluating the 
technical/management merit of AMSI's proposal.  However, Epoch 
provided no evidence nor any detailed statement of facts to support 
this allegation and, therefore, the unsupported allegation is not an 
adequate protest basis.  Bid Protest Regulations 4 C.F.R.  sec.  
21.1(c)(4), 21.5(f) (1997); Science Applications Int'l Corp., 
B-265607, Sept. 1, 1995, 95-2 CPD  para.  99 at 2.

2.[deleted].

3. In its initial protest letter (filed on March 31, 1997), Epoch 
argued exclusively that [deleted] had an unavoidable conflict of 
interest because it might be required to review its own products or 
those of its competitors, creating the potential for "impaired 
objectivity" on [deleted] part.  "Impaired objectivity" is but one of 
three broad categories of conflicts.  See Aetna Gov't Health Plans, 
Inc.; Foundation Health Fed. Servs., Inc., B-254397.15 et al., July 
27, 1995, 95-2 CPD  para.  129 at 12-13, for a discussion of the following 
three conflict types:  Type 1:  "unequal access to information" cases; 
Type 2:  "biased ground rules" cases; and Type 3:  "impaired 
objectivity" cases.  In its comments on the agency's report (filed on 
May 12), Epoch alleged for the first time, in very general terms, that 
[deleted] might also gain an unfair competitive advantage from working 
on the present contract.  We allowed each party to file an additional 
statement after comments were received.  In its additional statement 
(filed on May 27), Epoch explained that [deleted] might gain an unfair 
competitive advantage in future competitions because, in performing 
the various tasks, [deleted] would gain access to information not 
available to its competitors (a Type 1 conflict).  In our view, the 
later-raised allegation of an unfair competitive advantage accruing to 
[deleted] because of a Type 1 conflict presents a new and independent 
protest basis that is separate and distinct from the original basis of 
protest alleging a Type 3 conflict and must independently satisfy our 
timeliness requirements.  Vinnell Corp., B-270793; B-270793.2, Apr. 
24, 1996, 96-1 CPD  para.  271 at 7.  As this later-raised allegation is 
based upon the protester's general knowledge of [deleted] and the RFP 
requirements, this allegation should have been raised in the initial 
protest letter or within 10 days after Epoch's March 26 debriefing 
conference, at the latest.  4 C.F.R.  sec.  21.2(a)(2).  

4.[deleted].  Epoch has not alleged that [deleted] has any potential 
conflicts.

5. AMSI's conflict mitigation plan was set forth in full in AMSI's 
cost proposal.  While the technical/management evaluators did not have 
the entire plan before them for consideration, AMSI's 
technical/management proposal did state that AMSI realized that 
conflicts might be encountered, that AMSI had included a complete 
conflict mitigation plan in its cost proposal, that each corporate 
member of the AMSI team would have an [deleted], and that AMSI 
believed that [deleted] would allow it to perform the required work 
without [deleted].

6. In addition to the [deleted] safeguards present in the AMSI 
mitigation plan, since performance under the contract is ordered 
through the issuance of task orders, the Navy can also exercise care 
in controlling the scope of AMSI's and its subcontractors' work 
through proper contract administration.  This would provide yet 
another safeguard to prevent [deleted] from reviewing its own or its 
competitors' products under any task order issued by the Navy.  
Deloitte & Touche, 69 Comp. Gen. 463, 469 (1990), 90-1 CPD  para.  486 at 8.