TITLE:  Johnson Controls World Services, Inc., B-286714.3, August 20, 2001
BNUMBER:  B-286714.3
DATE:  August 20, 2001
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Johnson Controls World Services, Inc., B-286714.3, August 20, 2001

Decision

Matter of: Johnson Controls World Services, Inc.

File: B-286714.3

Date: August 20, 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.

Col. Michael R. Neds, and Raymond M. Saunders, 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

Protest against agency's proposed corrective action regarding organizational
conflicts of interest addressed in prior decision is denied, where agency's
proposed actions are a reasonable means for mitigating prior awardee's
potential competitive advantage and potential impaired objectivity.

DECISION

Johnson Controls World Services, Inc. (JCWSI) protests the Department of the
Army's proposed corrective action in response to our decision in Johnson
Controls World Services, Inc., B-286714.2, Feb. 13, 2001, 2001 CPD para. 20. In
that decision, we found that the awardee, IT Corporation, had improper
organizational conflicts of interest (OCI) under request for proposals (RFP)
No. DABT60-99-R-0013, issued to acquire various services at Fort Benning,
Georgia. JCWSI maintains that the proposed correction action is inadequate
to address the OCIs.

We deny the protest.

BACKGROUND

This acquisition (conducted under Office of Management and Budget Circular
A-76) was for a broad array of services to be performed at Fort Benning. The
Army identified IT as the apparent successful offeror under the
solicitation, and thus compared that firm's proposal to the in-house
proposal under the A-76 cost comparison procedures. As a result of this
comparison, the agency determined that it would be less expensive to
contract with IT for these services than to perform them in-house; it thus
awarded IT a contract.

JCWSI protested the agency's selection decision, maintaining that IT, by
virtue of the activities of one of its subcontractors (Innovative Logistics
Corporation (INNOLOG)), had an impermissible OCI. Specifically, JCWSI argued
that INNOLOG's activities in performing another contract (the integrated
sustainment maintenance (ISM) contract) unfairly gave the IT team access to
information (the executive management information system (EMIS) database)
and expertise (through INNOLOG's analysts performing the ISM contract) that
resulted in an impermissible competitive advantage. JCWSI also contended
that INNOLOG's contractual responsibilities under the ISM contract
conflicted with the IT team's performance of the Fort Benning services
contract, resulting in an "impaired objectivity" type of OCI.

We sustained the protest, agreeing that the IT team had both unfair
competitive advantage and impaired objectivity OCIs. We recommended that the
Army review the OCIs and consider whether steps could be taken to avoid,
neutralize or mitigate them, and that it exclude IT from the acquisition if
it determined that there were no feasible corrective measures.

In response to our decision, the agency advised our Office that it will
terminate IT's contract; it has required IT to terminate its teaming
relationship with INNOLOG for the Fort Benning procurement; [1] it will make
available to IT and JCWSI both the contents of the EMIS database and agency
personnel familiar with the database (as well as the ISM contract) to assist
the offerors in using and interpreting the database contents; and it will
then reopen the acquisition to allow the offerors an opportunity to submit
proposal revisions in those areas of their offers that relate to the data
contained in the EMIS database, and select a proposal for use in the A-76
public/private cost comparison. The agency then will conduct a new cost
comparison.

JCWSI challenges the agency's proposed actions on several grounds. [2] In
addressing possible OCIs, agencies are required to exercise common sense,
good judgment and sound discretion. Federal Acquisition Regulation sect. 9.505.
The agency's proposed actions meet this standard.

DISCLOSING EMIS DATA

JCWSI contends that providing the EMIS data is insufficient to put JCWSI on
an equal footing with IT, since it lacks access to the expertise of the
INNOLOG ISM contract analysts. JCWSI asserts that IT's relationship with
INNOLOG provided an opportunity for the expertise of the ISM analysts to
"percolate" through the IT organization. JCWSI also asserts that, even with
the EMIS information, it still would not have other ISM contract data that
was available to IT through the ISM analysts.

This argument does not provide a basis for questioning the proposed
mitigation approach. The agency states that the personnel it will make
available to IT are familiar with the EMIS database itself, as well as the
use and manipulation of the database, and that these personnel are familiar
with the information produced in connection with the performance of the ISM
contract (which is nothing more than a contract to provide the agency
detailed information about installation management activities). JCWSI has
proffered no evidence suggesting that the agency personnel are less familiar
with the database or its use than INNOLOG's personnel, or that their
expertise and familiarity with the overall management of the Fort Benning
installation is somehow inferior. Nor is there anything in the record that
would lead us to assume that this is the case. Thus, this argument does not
provide a basis for us to find the proposed mitigation action to be
inadequate.

LIMITED PROPOSAL REVISIONS

JCWSI argues that the agency's proposal to limit proposal revisions to
sections of their proposals affected by the EMIS data is inadequate to
overcome IT's alleged competitive advantage. According to JCWSI, the IT
team's access to the EMIS and ISM data provided it a competitive advantage
with respect to a large portion of the entire requirement, and allowing
offerors to revise only a small portion of their proposals thus will not
correct the problem.

The agency has proposed to allow the competitors an opportunity to revise
their proposals to the extent that they may be affected by the firms' access
to the EMIS data. Thus, nothing limits the degree to which offerors may
revise their proposals, provided they can legitimately show a nexus between
a proposal revision and the offeror's receipt and evaluation of the EMIS
data. To the extent that the protester's contention is that JCWSI and the
Army may disagree over a particular change, the protest is premature, since
there is no indication that such a disagreement has occurred. There thus is
no basis for questioning this aspect of the agency's proposed mitigation
effort.

FORT GORDON INFORMATION

JCWSI contends that the IT team had access to data relating to JCWSI's
performance of a contract at Fort Gordon, and that this data could
conceivably provide IT insight into how JCWSI prepared its proposal for the
Fort Benning requirement. JCWSI contends that the agency's proposed
corrective action fails to address this possible competitive advantage.

This assertion is without merit. Most importantly, JCWSI's own personnel
testified during our consideration of the protest that, because there were
significant differences between Forts Benning and Gordon in terms of troop
levels and types of equipment, data concerning Fort Gordon would be of only
limited utility and relevance in preparing a proposal for Fort Benning.
Hearing Transcript at 117-20. Moreover, the protest record contained no
evidence (and JCWSI provides none in connection with this challenge) that
JCWSI's Fort Gordon information was ever provided to IT by INNOLOG's ISM
contract analysts. On the contrary, to the extent that there is any evidence
bearing on this question, the protest record shows that INNOLOG was denied
permission to compete for the Fort Gordon contract because of its access to
the EMIS database; since the IT team did not submit an offer for Fort
Gordon, there would have been no reason for INNOLOG to have examined the
data for that installation or provided it to IT. [3] Finally, although JCWSI
was provided a copy of the IT team's proposal for the Fort Benning
acquisition, it has not identified anything in that proposal which reflects
knowledge of JCWSI's Fort Gordon performance information. Under the
circumstances, and especially in view of the admittedly limited usefulness
of this information, this argument does not establish that the proposed
corrective action is unreasonable.

IMPAIRED OBJECTIVITY

JCWSI contends that the proposed corrective action does not adequately
address the IT team's impaired objectivity OCI. As noted in our prior
decision, INNOLOG's ISM contract responsibilities included making
recommendations to the agency regarding the allocation of work and manpower
among the agency's various installations. We found that this responsibility
was potentially inconsistent with INNOLOG's teaming arrangement with IT;
since INNOLOG was in a position to recommend that work be allocated to Fort
Benning, such a recemmendation could potentially benefit IT. We concluded
that INNOLOG's objectivity regarding its ISM contract recommendations could
be impaired by virtue of its teaming relationship with IT. In response to
this concern, the Army's corrective action requires IT to terminate its
relationship with INNOLOG at Fort Benning. JCWSI asserts that this is
inadequate to address IT's impaired objectivity, because it deals only with
the firms' relationship at Fort Benning, and does not address any continuing
relationship at other installations.

This allegation ignores the fact that the record shows that IT and INNOLOG
do not have any current teaming relationships. In this regard, IT has
submitted letters in which it advised INNOLOG of its termination of the
teaming arrangement between the two firms, not only at Fort Benning, but
also at Fort Rucker, the only other installation where the team was awarded
a contract. Intervenor's Comments, exh. A. In the absence of a teaming
agreement between the two firms, there is no basis to find potential
impaired objectivity and, accordingly, no basis to object to the Army's
proposed corrective action.

RESPONSIBILITY

JCWSI asserts that IT should be found ineligible for the contract on grounds
that the firm is not a responsible contractor. JCWSI maintains that IT's
prior actions reflect a lack of integrity, and that the firm should be found
nonresponsible, and precluded from receiving the award, on that basis. Our
Office will not review an affirmative responsibility determination absent a
showing either that government officials have acted in bad faith, or that
definitive responsibility criteria have not been followed. 4 C.F.R. sect.
21.5(c). Neither exception applies here. In any case, the assertion is
premature, since the agency has not yet identified the apparent successful
offeror for the Fort Benning requirement.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. The record shows that IT also has terminated its teaming arrangement with
INNOLOG with respect to a contract awarded to the team at Fort Rucker.

2. To the extent JCWSI takes the position that the OCIs identified in our
earlier decision are not susceptible to mitigation, its protest is untimely.
In sustaining its protest, we did not rule that mitigation was not feasible;
if JCWSI believed the OCIs could not be mitigated, it was required to
protest on this basis within 10 days after receiving our decision. See 4
C.F.R. sect. 21.2(a)(2) (2001).

3. There is no suggestion that the IT team knew that JCWSI was competing for
the Fort Benning contract, and there would therefore have been no incentive
for the IT team to have attempted to review the performance of unknown
competitors in preparing its Fort Benning offer.