TITLE:  Johnson Controls World Services, Inc., B-286714.2, February 13, 2001
BNUMBER:  B-286714.2
DATE:  February 13, 2001
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Johnson Controls World Services, Inc., B-286714.2, February 13, 2001

Decision

Matter of: Johnson Controls World Services, Inc.

File: B-286714.2

Date: February 13, 2001

Stuart B. Nibley Esq., Joseph J. Dyer, Esq., and Robert F. Pezzimenti, Esq.,
Seyfarth Shaw, for the protester.

Richard L. Moorhouse, Esq., Dorn C. McGrath III, Esq., and Mary Kay Ogden,
Esq., Reed Smith, for IT Corporation, an intervenor.

Raymond M. Saunders, Esq., and Michael R. Neds, Esq., Department of the
Army, for the agency.

Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest that awardee had unfair competitive advantage due to
organizational conflict of interest is sustained where awardee's proposed
subcontractor possessed information through its work as a government
contractor, the information was not available to other offerors, the agency
took no steps to identify or mitigate the conflict in advance, and there
were no meaningful procedures in place to prevent interaction between the
employees possessing the information and the employees preparing the
proposal.

2. Protest that awardee has impaired objectivity type of organizational
conflict of interest is sustained where record shows that, under the terms
of another contract, proposed subcontractor will be making recommendations
that could benefit the awardee, and the proposed subcontractor could be
called upon to evaluate the performance of the awardee team.

DECISION

Johnson Controls World Services, Inc. (JCWSI) protests the award of a
contract to IT Corporation under request for proposals (RFP) No.
DABT60-99-R-0013, issued by the Department of the Army for services to be
performed at Fort Benning, Georgia. JCWSI maintains that IT, through one of
its subcontractors (Innovative Logistics Techniques, Inc. (INNOLOG)), has an
impermissible organizational conflict of interest (OCI), and that the award
therefore was improper.

We sustain the protest.

BACKGROUND

This acquisition was conducted pursuant to Office of Management and Budget
Circular A-76, and is one of numerous A-76 studies being conducted by the
Army in connection with its installation support services requirements. A
broad array of services are contemplated for this requirement, including
buildings maintenance, family housing maintenance, utility systems
operations and maintenance, heating, ventilation and air conditioning
systems maintenance, grounds maintenance, self-help services, water and
wastewater plant operations and maintenance, range maintenance, installation
transportation services, base supply services, material maintenance
services, cemetery services, military logistical planning, support and
execution, and remote camp operations, maintenance and support. RFP at
C-vi-vii. The solicitation provided that the lowest-cost technically
acceptable proposal would be selected for purposes of the cost comparison
with the Army's most efficient organization (MEO). RFP at M-1. After the
receipt of offers, the evaluation of proposals, the conduct of discussions
and the submission of final proposal revisions, IT was selected as the
lowest-cost, technically acceptable offeror. IT's proposal was then compared
to the government's MEO and found to offer a cost savings as compared to
performance by the government.

JCWSI's does not challenge any aspect of the agency's conduct of the
procurement from the standpoint of its evaluation of proposals, conduct of
discussions or eventual source selection. Instead, the protest centers on a
teaming arrangement between IT and INNOLOG. According to JCWSI, INNOLOG's
activities under another contract created an impermissible OCI that should
have led to the exclusion of the IT team from competing for this
requirement. In this regard, INNOLOG

currently is performing another contract, known as the integrated
sustainment maintenance (ISM) contract. Under that contract, according to
JCWSI, INNOLOG had access to detailed agency information that provided the
IT team with an improper competitive advantage in preparing its proposal.
The protester further maintains that INNOLOG's responsibilities under its
ISM contract will conflict with the IT team's performance under the Fort
Benning contract at issue here.

INNOLOG's ISM Contract

Under its ISM contract, INNOLOG established and maintains the Executive
Management Information System (EMIS) database, which compiles detailed work
order information relating to maintenance activities performed at various
Army installations worldwide (including Fort Benning). Hearing Transcript
(Tr.) at 297. For example, when a piece of Army equipment (such as a vehicle
or weapon) requires repair, a work order is issued for that repair. In the
course of the repair effort, information from the work order (including the
identity of the equipment, the parts used to make the repair, the number of
productive labor hours required to perform the repair, the average hourly
cost of labor (both direct and indirect) and the amount of time the piece of
equipment remains in a repair status) is entered into other Army databases
(such as the Standard Army Maintenance System (SAMS)). Tr. at 298-99. Data
from these other systems is loaded from each installation into the larger
EMIS database. The data in the EMIS can be retrieved in the form of either
standardized reports or, using a software tool that allows the user to
formulate custom search queries, in a customized format. Tr. at 13-15. What
is pertinent for purposes of this protest is that, using the EMIS, it is
possible to obtain relatively in-depth, comprehensive historical information
relating to maintenance activities performed at Fort Benning.

In addition to maintaining the EMIS database, INNOLOG's ISM contract
includes responsibilities relating primarily to providing the Army with
analytical assistance in evaluating the agency's logistics needs and
planning. Among other activities, INNOLOG may be called upon to, for
example, participate on command logistics review teams (CLRT). These CLRTs
review the performance of logistics functions (whether the activity is
performed by government or contractor personnel) at various installations;
essentially, the objective of these reviews is to identify inefficiencies
and deficiencies in the performance of installation support activities. ISM
Contract, Statement of Work (SOW). Under the terms of the ISM contract,
INNOLOG may also be called upon (whether as a member of a CLRT or in some
other capacity) to evaluate the performance of installation support
functions on a broader basis, and to make recommendations that could result
in the transfer of a function from one installation to another. Id.

The Federal Acquisition Regulation (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 sect.
9.505. JCWSI alleges that the award to IT presents both types of conflict,
and that they have not been mitigated. We discuss each separately below.

UNFAIR COMPETITIVE ADVANTAGE

JCWSI asserts that INNOLOG's access to the information in the EMIS database,
as well as its familiarity with the management of installation support
activities at Fort Benning, gained through its performance of the ISM
contract, provided the IT team with an unfair competitive advantage in
preparing its proposal. JCWSI maintains that INNOLOG's unique
position--which gave it access to far more valuable information than that
included in the RFP and available to JCWSI--gave the IT team detailed
insight into how it could reduce its staffing or otherwise make its proposed
organization more efficient and, therefore, less costly.

Both the agency and the intervenor contend that the EMIS data would not have
been useful in the competition because offers were to be evaluated against
the workload information included in the RFP, and because the information in
the EMIS database does not reveal the current staffing, organization or
structure. They also contend that, in any case, INNOLOG had an effective
"firewall" in place that prevented the information from being transmitted.
The Army and the intervenor also assert that there is no evidence in the IT
proposal showing that the information was used and in fact conferred a
competitive advantage.

FAR sect. 9.505(b) cites two kinds of information that can provide an offeror an
unfair competitive advantage: proprietary information obtained from the
government without proper authorization, and source selection information.
However, the regulation recognizes that "conflicts may arise in situations
not expressly covered in this section 9.505. . . . Each individual
contracting situation should be examined on the basis of its particular
facts and the nature of the proposed contract." FAR sect. 9.505. The information
principally in question here, EMIS data, does not fall within either
category specified in the regulation, since it was presumably obtained with
proper authorization and not in the course of the source selection process.
However, if the information is as JCWSI alleges, it clearly could have
provided the IT team with an advantage in the competition. That advantage
would be an unfair competitive advantage to the extent that the IT team, and
no other offeror, had relevant nonpublic information--beyond that which
would be available to a typical incumbent installation logistics support
contractor--that would assist it in obtaining the contract. 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 18. Once it is established that an offeror
has an unfair competitive advantage, the relevant question becomes whether
the agency took reasonable steps to avoid, neutralize or mitigate the
advantage. Id.

As discussed in detail below, the record shows that the information in the
EMIS database, which was available only to the IT team, through INNOLOG, is
competitively useful, and that the agency took no effective steps to prevent
the information from being shared between INNOLOG's ISM contract personnel
and the IT team personnel preparing the proposal.

Competitive Utility of EMIS Data

The record shows that the EMIS data provides a significant level of detail
that was not provided in the RFP. The RFP provided only gross information
relating to categories of equipment and numbers of work orders. RFP at Tech.
exh. 5.14-003. For example, the RFP specified that there were 19,612 weapons
at Fort Benning, and that there were 1,497 work orders processed against
that equipment in 1997. Id. In comparison, the limited amount of EMIS data
in the record [1] shows that, in the area of weapons, the system can show
not only the gross number of weapons repaired during 1997, but also the
specific types of weapons repaired and the parts used for the repair. JCWSI
Comments, Dec. 15, 2000, at exh. K. From this information, an offeror could
deduce the percentage of total repairs by category of weapon (for example,
90 percent of all repairs were made to M-16 rifles as opposed to anti-tank
weapons), as well as the type of repair made and the frequency of that type
of repair (of all M-16 repairs, 90 percent involved replacement of the rifle
stock instead of the trigger mechanism). The protester also testified that
the EMIS data is useful in other specific ways. For example, the protester's
information technology manager (who was provided an opportunity to run
sample queries on the EMIS database during the pendency of the protest for
purposes of learning about the system) testified that the EMIS data allowed
him to obtain detailed work order information. Tr. at 11. He asserted
(unrebutted by the agency and intervenor) that an offeror could use this
data to reach conclusions about the organization of work among the various
shops and to discern "peaks and valleys" in the workflow, which would
provide insight for purposes of refining an offeror's staffing configuration
through cross-utilization. Tr. at 24. JCWSI's proposal manager provided
similar testimony. Tr. at 95-96, 102-03 and 180-81.

The Army and the intervenor also offered extensive testimony on the
usefulness of the EMIS data. However, this testimony was aimed at
establishing, not that the EMIS data would be of no use in preparing a
proposal, but that the database does not include the best possible
information. For example, INNOLOG's program manager for the ISM contract
testified that direct labor rates--and, thus, the precise staffing used for
a particular repair--were not discernible from the cost information in the
EMIS database because of the way costs are accounted for in the system.

Tr. at 407-10. Similarly, the contracting officer testified that relying on
the EMIS database in formulating a proposal would involve some risk because
the evaluators looked to the RFP's evaluation criteria and performance work
statement in evaluating the proposals. Tr. at 193. However, the contracting
officer also testified that the EMIS data would be of some utility in
preparing an offer, although the information would have to be deciphered.
Tr. at 191-93. The record also includes an affidavit executed by another
contracting officer at Fort Gordon--where JCWSI is the incumbent contractor,
and where INNOLOG had been denied permission to compete because of its
access to the EMIS database--in which he states: "The information collected
by INNOLOG was expended manhours as well as total manhours by work center
for the work performed at Fort Gordon only. This could be used to determine
staffing for the maintenance shops as well as how they were organized."
Affidavit of Fort Gordon Contracting Officer, Dec. 22, 2000.

Considering the record as a whole, we find that, while the EMIS data perhaps
would not enable an offeror to determine the most efficient--and thus least
costly--staffing scheme, it would make it possible to refine and reduce
staffing levels significantly beyond what would be possible using the RFP
information alone. While the agency and intervenor appear to be correct, for
example, that precise labor rates cannot be determined, it nonetheless
appears that the EMIS data could be useful in determining the nature of the
work performed in far greater detail than would be possible otherwise. Such
enhanced detail regarding the actual work performed could provide an offeror
the opportunity to formulate a better staffing profile in the sense that the
firm could propose a smaller number of employees (at a lower skill level) in
arriving at its proposed staffing mix.

Information Known to the INNOLOG ISM Contract Analysts

Beyond the information in the EMIS database, the record shows that INNOLOG's
ISM contract analysts may have had further insight into how the maintenance
activities are staffed and organized at Army installations. In this regard,
the training and doctrine command's (TRADOC) director of logistics had
occasion to comment as follows on the roles and responsibilities of
INNOLOG's ISM contract analysts:

My Innolog Maintenance Analyst here [TRADOC headquarters] and at the
installations are embedded in our organization and know everything that goes
on to include the number of people we use to conduct maintenance and supply.

E-mail from TRADOC Director of Logistics, Dec. 8, 1999. This conclusion
about the INNOLOG analysts is consistent with the statement of work in the
ISM contract. For example, INNOLOG's is required to provide evaluation
services in connection with maintenance planning at the local, regional and
command levels by evaluating existing maintenance concepts and policies
related to maintenance activities at TRADOC installations, and by
determining the efficiency and impact of proposed solutions to maintenance
requirements. ISM Contract, SOW, Task 3. As noted, INNOLOG analysts may also
act as members of the CLRTs, which assist the agency in evaluating the
efficiency of logistics support activities. Id., Tasks 7, 8, 9. These
activities illustrate that, by virtue of its performance of the ISM
contract, INNOLOG is uniquely positioned to know about the way in which
logistics support activities are performed and organized.

The agency and intervenor argue that any advantage available to the IT team
through INNOLOG's ISM contract is essentially the same as the advantage
JCWSI had due to the detailed information it gained through performance of
its installation support contract at Fort Gordon. We disagree. INNOLOG's ISM
contract responsibilities are fundamentally different from those
responsibilities typically borne by an incumbent installation support
contractor. While an installation support contractor performs the day-to-day
activities, and may garner detailed information about the organization and
staffing used to perform its work, the resulting advantage that the
contractor may gain for future procurements is no different than the
advantage gained by any incumbent contractor; such an advantage is not
unfair or otherwise improper. PRC, Inc.--Recon., B-274698.4, July 10, 1997,
97-2 CPD para. 10 at 2. In contrast, INNOLOG's ISM contract duties are
comprehensive and extend well beyond the level of an installation logistics
support contractor. Specifically, under the ISM contract, INNOLOG not only
gathers EMIS data concerning the performance of the services, but also
provides the agency with analysis and evaluation of how the work is (and
should be) performed. For example, as noted, INNOLOG participates as a
member of CLRTs, which evaluate installation support functions and make
recommendations to improve efficiency. INNOLOG's involvement in the
management of the support activities is of such great depth that INNOLOG
actually developed the level of effort used in the solicitation for the Fort
Knox installation support requirement, Tr. at 419-20; TRADOC's director of
logistics herself confirms the depth of INNOLOG's involvement in stating
that the INNOLOG analysts are "embedded" in the agency. Thus, it is our
sense from the record that INNOLOG indeed was in the unique position of both
having access to information to which no other offeror had access, and being
involved in the management of the Fort Benning support activities and the
Army's installation support activities generally. This being the case, any
incumbency advantage enjoyed by JCWSI (or by any other installation support
contractor) is simply not comparable to the IT team's competitive advantage
by virtue of INNOLOG's ISM contract.

We conclude that the EMIS data and ISM contract information available to the
IT team was competitively useful and not of the type available to any other
offeror, and that mitigation was required to prevent IT from having an
unfair competitive advantage in preparing its proposal for the Fort Benning
requirement. [2]

Mitigation

Under FAR subpart 9.5, the contracting agency is responsible for avoiding,
mitigating or neutralizing OCIs. One method for accomplishing this under the
regulation is the inclusion of a clause in a contract outlining the
restrictions concerning the contractor's eligibility for future awards. FAR
sect. 9.507-2. INNOLOG's ISM contract contains such a clause, entitled
"Organizational Conflict of Interest Clause," which states, in relevant
part, as follows:

This . . . clause is included in this contract per the requirements of FAR
Subpart 9.5. Effective with the date of this contract, the Contractor is
restrained from . . . 3) [engaging] in any contractual activities which may
impair his ability to render unbiased advice and recommendation; or 4) in
which he may have an unfair competitive advantage as a result of the
knowledge, information and experience gained during the performance of this
contract. . . .

The contractor agrees to develop, maintain, and administer such programs as
are necessary to thoroughly train and educate its appropriate employees as
to the provisions of Part 9 of the [FAR] and its underlying policy, and this
contract provision so that each employee will know and understand the
absolute necessity of safeguarding information developed under this contract
from anyone other than the contractor's employees who have a need to know,
and the U.S. Government.

INNOLOG ISM Contract, at H-11.

The record shows that the contracting activity relied solely on the terms of
this clause in concluding that there were adequate protections against a
disclosure of INNOLOG's ISM contract information to the IT team members
preparing the IT proposal. After becoming aware of INNOLOG's involvement
with the IT team, the activity took no affirmative steps to determine
whether a conflict existed or whether mitigation was called for, and never
determined whether INNOLOG itself had moved to mitigate any conflict by
preventing interaction between INNOLOG ISM contract personnel and the
personnel preparing the IT team proposal. Tr. at 376-77. In other words, it
appears the agency did not enforce the terms of the OCI clause. Instead, the
Army proceeded as if the clause were self-executing, leaving INNOLOG to
determine how the provisions should apply. The agency's reliance on INNOLOG,
in lieu of the agency taking affirmative action, was inconsistent with the
FAR. Under FAR sect. 9.504(a), contracting officers are required to analyze
planned acquisitions to identify potential OCIs as early in the acquisition
process as possible, and to avoid or mitigate them before award. The Army
did not do this. Further, beyond compliance with the FAR, the agency's
approach of essentially leaving the determination of the existence, as well
as the mitigation, of a potential conflict solely to the contractor--who is
not in a position to make an objective judgment--simply is not a reasonable
means of avoiding or mitigating an OCI. [3] See Aetna, supra, at 15-16.

The activity's failure to act is puzzling in light of the fact that INNOLOG
had been openly pursuing installation logistics support contracting
opportunities, and that other entities within the Army were aware of
INNOLOG's potential conflict and had advised INNOLOG of their views.
Specifically, in October 1999, the contracting officer at Fort Gordon denied
INNOLOG permission to attend a presolicitation conference for the logistics
support contract there, based on her conclusion that the OCI clause
precluded it from competing for that contract. E-mail Exchange Between
INNOLOG's Business Development Manager and the Fort Gordon Contracting
Officer, Oct. 29, 1999. Thereafter, in response to a December 1999 inquiry
from INNOLOG's ISM program manager regarding whether INNOLOG had an OCI that
would prevent it from competing as a team member to perform the automation
and supply operations portions of the Fort Knox requirement, the director of
logistics for TRADOC stated (in a message quoted in part above):

We need to talk. My Innolog Maintenance Analyst here and at the
installations are embedded in our organization and know everything that goes
on to include the number of people used to conduct maintenance and supply.
There is concern from the installations that they may be feeding you or
their respective corporations (for non INNOLOG folks) the information on how
many and how. You know how open I have been with those who work for me. Only
the lawyers can tell you whether there would be protests on conflicts of
interest. You could be wrapped up in litigation forever.

E-mail from TRADOC Director of Logistics, Dec. 8, 1999.

Firewall

Notwithstanding the agency's failure to take steps when the potential
conflict first arose, the agency and intervenor maintain that no competitive
advantage resulted because IT never actually obtained INNOLOG's ISM contract
information or used it in preparing its proposal. In this connection, we
obtained extensive evidence relating to the agency's claim that INNOLOG had
effective "firewall" procedures in place that precluded INNOLOG employees
working on the ISM contract from interacting with the IT team member
employees who prepared IT's proposal. We find that there were not adequate
procedures in place. Rather, there was both attempted and actual interaction
between IT team employees and INNOLOG's ISM employees.

For example, in November 1999, the IT team considered establishing a teaming
arrangement for installation support services acquisition at Fort Knox. IT's
Senior Operations Manager's First Declaration, Nov. 16, 2000, at 2. In
reaction to this, INNOLOG's business development manager suggested that IT's
senior operations manager contact INNOLOG's ISM analyst at Fort Knox to
query him regarding the organization and staffing at Fort Knox. Id. at 3.
IT's senior operations manager and INNOLOG's business development manager
worked, together with INNOLOG's program manager for the ISM contract, to
arrange a meeting among IT's senior operations manager, INNOLOG's business
development manager and INNOLOG's ISM analyst at Fort Knox. Id. at 3-4; Tr.
at 411-12. IT's senior operations manager states in his declaration that he
had a telephonic discussion with INNOLOG's Fort Knox ISM analyst and that he
"expressed to him that I would like him to show me these facility areas and
to explain the reorganization and present staffing of the DPW and DOL
functions." IT's Senior Operations Manager's First Declaration, Nov. 11,
2000, at 3. The Fort Knox ISM analyst was concerned that this contact might
be inappropriate in light of his ISM contract duties, so he apparently
contacted the program manager for the ISM contract, who directed the parties
not to meet. IT's Senior Operations Manager's First Declaration, Nov. 11,
2000, at 4; Declaration of INNOLOG's Fort Knox ISM Analyst, Nov. 16, 2000.
Accordingly, the record shows that the IT team proposal preparation
personnel contacted the INNOLOG ISM contract analyst, there was an attempt
to obtain information that would be useful in preparing the IT team's
proposal, and this attempt was actively facilitated by the INNOLOG ISM
contract manager until the INNOLOG ISM analyst raised a concern.

As another example, when IT and INNOLOG subsequently began preparations for
the Fort Benning acquisition, INNOLOG sought the expertise of the INNOLOG
ISM analyst that had the most information relating to the installation under
consideration. Among the individuals designated as possible attendees for
the Fort Benning presolicitation site visit was INNOLOG's ISM analyst for
Fort Rucker. Of significance for our purposes, this individual was a member
of the CLRT that reviewed Fort Benning operations in 1998. This ISM analyst
ultimately did not attend the site visit at Fort Benning because he was
apparently unavailable during the dates in question. Affidavit of INNOLOG's
Fort Rucker ISM Analyst, Nov. 17, 2000, at 1. INNOLOG's business development
manager then contacted the ISM program manager to see whether another ISM
analyst might be available to participate in the Fort Benning site visit.
Tr. at 492. The ISM program manager arranged for the senior ISM analyst
responsible for INNOLOG activities at the headquarters for the U.S. Army
Forces Command (FORSCOM) in Atlanta, Georgia, to attend the site visit. Id.
This individual (whom the record shows has "regional" access to the EMIS
database, which includes data for Fort Benning, Tr. at 493) accompanied
INNOLOG's business manager on the Fort Benning site visit. (We note as well
that, although the intervenor provided nondisclosure statements executed by
several ISM employees with access to the EMIS database, a nondisclosure
statement was not furnished for this individual despite a request by our
Office that the intervenor provide evidence reflecting the existence of a
firewall between ISM and other INNOLOG employees.) The activities
surrounding the Fort Benning acquisition show that every effort was made to
obtain the advice and assistance of the INNOLOG ISM analyst possessing the
greatest expertise pertaining to the installation, and that INNOLOG's ISM
program manager actively facilitated this effort.

In light of the foregoing, there is no basis for finding that there was an
effective firewall between INNOLOG's ISM employees and the IT team employees
preparing the proposal for this acquisition. Since we also conclude that the
agency failed to take any other steps to mitigate the IT team's OCI
resulting from INNOLOG's ISM contract, we sustain this aspect of JCWSI's
protest.

IMPAIRED OBJECTIVITY

An impaired objectivity OCI exists where a firm's obligations under one
contract could impair its objectivity in providing advice or assistance to
the government under another contract. See FAR 9.505(a); Aetna, supra, at
13. JCWSI maintains that INNOLOG has an impaired objectivity OCI with regard
to the Fort Benning contract because it will be required under its ISM
contract to provide the agency with advice concerning the efficiency of the
logistics operations that will be run by the IT team, and to recommend the
allocation of work and manpower from one installation to another based on
its evaluation and analysis. According to JCWSI, INNOLOG will be in a
position to evaluate itself and its team members, and to make
recommendations that additional work be moved from another facility to Fort
Benning where either it or one of its team members will benefit from the
increased requirements.

The agency and the intervenor take the position that, because any
recommendations made under INNOLOG's ISM contract are closely scrutinized by
agency personnel, there is no reasonable possibility that a biased
recommendation would ever be implemented. The agency and intervenor also
take the position that INNOLOG's ISM services would never be ordered for
Fort Benning because the Army is aware of INNOLOG's status as an
installation support contractor at the facility. [4]

The SOW under the ISM contract encompasses reviews where INNOLOG will
evaluate the efficiency of operations at any TRADOC installation, and make
recommendations that could affect the workload at any given installation. In
this regard, as discussed in some detail above, INNOLOG's personnel are
required to provide evaluation services in connection with maintenance
planning at the local, regional and command levels by assessing existing
maintenance concepts and policies related to maintenance activities at
TRADOC installations, and by determining the efficiency and impact of
proposed solutions to maintenance requirements. INNOLOG ISM Contract, SOW,
Task 3. INNOLOG analysts may also act as members of the agency's CLRTs,
which assist the agency in evaluating the efficiency of logistics support
activities. Id., Tasks 7, 8, 9. The record also shows that INNOLOG provides
advice and assistance to the agency under what is referred to as its center
of excellence program, Tr. at 442-44, under which different installations
"compete" to perform a particular activity, for example, the repair of heavy
vehicles. INNOLOG's analysts provide analysis and recommendations to support
the Army's decisions regarding where particular maintenance activities
should be performed. Tr. at 442-44, 455-59.

In our view, even if INNOLOG were not called upon to directly evaluate and
make recommendations about the logistics activities at Fort Benning, it
could be called upon to evaluate and make recommendations relating to other
installations, and those recommendations could ultimately have an impact on
the amount of work to be performed by the IT team at Fort Benning. Simply
stated, there is a fundamental conflict between performing installation
support services, on the one hand, and evaluating the efficiency of those
services (and making recommendations about where those activities should be
performed), on the other.

Neither the agency nor the intervenor denies that such a conflict
potentially may exist. Rather, they take the view that the agency can
mitigate such a potential conflict, either by not using the ISM contract
where a conflict exists with regard to a particular task, or by discounting
the weight given to the firm's recommendations. Such ad hoc mitigation
activity, however, is not a substitute for the preaward deliberation
contemplated under FAR sect. 9.504. Especially in light of evidence in the
record reflecting an interest by the IT team in participating in more than
one of the agency's installation support procurements, there is the
potential for progressively greater concern about an appearance of impaired
objectivity on the part of INNOLOG in the performance of its ISM contract.
Accordingly, we also sustain this aspect of JCWSI's protest.

RECOMMENDATION

We recommend that the Army review both of the IT team's apparent OCIs and
consider whether they can be avoided, neutralized or mitigated. Based on
that review, the Army should take appropriate corrective measures. If the
Army concludes that no feasible corrective measures would be adequate to
address the conflicts, we recommend that the IT team's contract be
terminated, that it be disqualified from the competition, and that the
agency perform its cost comparison under Circular A-76 using JCWSI's
proposal, if otherwise proper. We further recommend that the agency
reimburse JCWSI the reasonable costs of filing and pursuing its protest,
including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(d)(1). JCWSI's
certified claim for costs, detailing the time spent and the costs incurred,
must be submitted to the agency within 60 days of receiving this decision.
4 C.F.R. sect. 21.8(f)(1).

The protest is sustained.

Anthony H. Gamboa

Acting General Counsel

Notes

1. The EMIS data in the record is comprised of spreadsheets generated in
response to sample queries submitted by JCWSI's personnel during their
demonstration of the system. The information in the record thus is
illustrative of only some of the capabilities of the EMIS.

2. The intervenor urges our Office to find that there was no possibility
that JCWSI was prejudiced by the potential availability of the EMIS
information because, even if the information was useful, the number of
employees JCWSI claims could have been affected is not adequate to eliminate
the price difference in the proposals. Such an analysis, however, ignores
consideration of the number of employees by which the IT team may have
reduced its proposal through the use of the information. Such possible
prejudice is sufficient to establish an impropriety. See Aetna, supra, at
19.

3. The agency's failure extended to the OCI training provision, with which,
the record shows, INNOLOG had not fully complied. The intervenor has
provided documents embodying INNOLOG's compliance and ethics policies,
Intervenor's Hearing exh. 3, but there is no indication that these materials
are used in connection with any training program conducted for INNOLOG's ISM
employees, or that these materials are provided to those individuals. The
record also includes a copy of INNOLOG's training materials for ISM/EMIS
database users. Intervenor's Hearing exh. 2. These materials contain no
mention of any issue relating to the sensitivity of the data, the employees'
obligation to safeguard the information in the EMIS database, or the
employees' overall obligations under FAR part 9 or the ISM contract.
INNOLOG's business development manager testified that he was unaware of any
training efforts (or written materials) within the company that were
designed to provide guidance to the ISM employees regarding OCIs and that,
in fact, he had never heard the term "mitigation plan." Tr. at 246-48.
INNOLOG's ISM program manager testified that, to the extent the ISM
employees receive any training in this area, it is in the context of
describing to the employees the structure of the EMIS database. Tr.
at 402-03.

4. The agency and intervenor take the position that this allegation is
untimely because the record shows that, as of November 14, 2000, JCWSI
clearly knew that INNOLOG performed CLRT review services for the Army, and
the assertion was not raised until December 15, more than 10 days later. See
4 C.F.R. sect. 21.2(a)(2) (2000). We find the argument timely. Even if JCWSI was
aware of the CLRT activities of one of INNOLOG's ISM analysts, JCWSI did not
have a copy of the SOW for INNOLOG's ISM contract until it was furnished by
the agency in a supplemental filing on December 5, 2000, and was therefore
unaware of the true breadth of the ISM contract or INNOLOG's involvement
with the agency's review and oversight activities. We think the protester
reasonably could withhold filing its protest until it received this
document; since its protest on this issue was filed within 10 days after it
received the SOW, it is timely.