THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON MAY 25, 1995 __________________________________ DENIED: April 13, 1995 __________________________________ GSBCA 13139-P, 13155-P, 13156-P[foot #] 1 CAELUM RESEARCH CORPORATION, Protester, and PRODUCTIVE DATA SYSTEMS, INC., Protester/Intervenor, v. DEPARTMENT OF TRANSPORTATION, Respondent, and MODERN TECHNOLOGY SYSTEMS, INCORPORATED, Intervenor. William L. Walsh, Jr., Lars E. Anderson, J. Scott Hommer, III, and Wm. Craig Dubishar of Venable, Baetjer and Howard, McLean, VA, counsel for Protester Caelum Research Corporation. ----------- FOOTNOTE BEGINS --------- [foot #] 1 GSBCA 13139-P refers to Caelum Research Corporation's (Caelum's) protest; GSBCA 13155-P and 13156-P refer to the protests which survived when Anstec, Inc. (Anstec) withdrew its protest, GSBCA 13087-P. Caelum and Productive Data Systems, Inc. (PDS) had timely intervened in Anstec's original protest against this award. When Anstec withdrew its protest, the Board permitted Caelum and PDS to pursue it, and docketed these protests as GSBCA 13155-P and 13156-P, respectively. ----------- FOOTNOTE ENDS ----------- Ronald S. Perlman and Ellen F. Randel of Porter, Wright, Morris & Arthur, Washington, DC, counsel for Protester/Intervenor Productive Data Systems, Inc. Cathryn G. Cason and A. L. Haizlip, Federal Aviation Administration, Department of Transportation, Oklahoma City, OK, counsel for Respondent. Michael W. Clancy, Richard P. Rector, and Kevin P. Mullen of Piper & Marbury, Washington, DC, counsel for Intervenor Modern Technology Systems, Incorporated. Before Board Judges HYATT, WILLIAMS, and DeGRAFF. WILLIAMS, Board Judge. In this protest, Caelum challenges on numerous grounds the award of a contract for federal information processing (FIPs) services by the Federal Aviation Administration (FAA) to Modern Technology Systems, Inc. (MTS).[foot #] 2 First, protester alleges a violation of the Procurement Integrity Act (the Act) based upon a former FAA official's subsequent employment with a subcontractor of the awardee. Caelum contends that this individual was a procurement official within the meaning of the Act in that he participated personally and substantially in the procurement while in Government. Further, Caelum claims this individual's participation as an employee of MTS' subcontractor OAO Corporation (OAO) in a "red team" review of MTS' proposal tainted the award, conferred an unfair competitive advantage on MTS, and requires the disqualification of MTS/OAO from this procurement. Caelum also claims that the agency failed to conduct an investigation of a possible violation of the Act as mandated by Federal Acquisition Regulation (FAR) 3.104-11. We conclude that protester has failed to meet its burden of proving a violation of the Act; thus, we deny these grounds of protest. We agree that FAA failed to conduct an investigation of possible violations of the Act, but, because we resolve the procurement integrity issue in this proceeding, we do not remand the matter to the agency for further investigation. Because in this case the fully developed record contains no evidence that ----------- FOOTNOTE BEGINS --------- [foot #] 2 By letter dated January 24, 1995, protester/intervenor PDS advised the Board that it would be unable to participate actively in the protest proceedings and would not file briefs or attend the hearing. Letter from Ronald S. Perlman, Esq., to the Board at 1 (Jan. 24, 1995). Thus, only Caelum pursued the case and, for ease of reference, GSBCA 13139-P, 13155-P, and 13156-P will be referenced as Caelum's protest. PDS supported Caelum's protest "due to the procurement integrity violation and because the source selection decision lacked a rational basis." ----------- FOOTNOTE ENDS ----------- the violation adversely impacted Caelum's ability to compete for the award, Caelum suffered no prejudice, and we deny this ground of protest. In a related count, Caelum claims the award to MTS violates the FAR prohibitions against organizational conflicts of interest. Here, Caelum is claiming that MTS/OAO enjoyed an unfair competitive advantage because the services being procured were developed under the former FAA employee's supervision and control. We deny this ground of protest, as the record does not support this allegation. Caelum further contends that FAA failed to conduct meaningful discussions with it and that the best and final offer (BAFO) process and evaluation was a sham. These allegations stem from the FAA's policy not to conduct technical discussions with any offeror as to any technical subfactor which was initially rated a "2" (satisfactory) or better. Consistent with this, FAA did not evaluate any information received in an offeror's BAFO if it related to any technical subfactor which was already rated a "2" or higher. We deny these grounds of protest because protester has not demonstrated that it suffered any prejudice. Caelum has not identified any aspects of its proposal which contained deficiencies or uncertainties which warranted discussions. Since FAA also did not engage in discussions with MTS, the two offerors were treated equally; neither had an opportunity to have any aspect of its technical proposal evaluated at BAFO. Caelum also complains that FAA failed to evaluate offerors' costs properly. We deny this ground of protest because the record supports the conclusion that the rates proposed by MTS are realistic. Caelum also contends that FAA improperly held post-BAFO discussions with MTS by soliciting and evaluating information on its net worth and how MTS would finance the contract. We agree that FAA improperly conducted post-BAFO discussions, but deny this ground of protest because Caelum has not demonstrated that the post-BAFO discussions affected the evaluation or otherwise prejudiced it. Protester also challenges the best value determination, claiming the source selection official (SSO) failed to justify award to the lower priced, lower scored proposal. We deny this ground of protest, finding that the SSO deemed the proposals technically equivalent, recognizing that both offerors would provide the same incumbent personnel and concluded that, therefore, Caelum's technical proposal was not worth the $1.6 million cost premium. Findings of Fact Facts Relating to Timeliness[foot #] 3 Anstec's Protest On November 28, 1994, Anstec filed a protest challenging FAA's award to MTS, GSBCA 13087. Award was made on November 18, 1994. Anstec raised three grounds of protest. First, Anstec claimed a violation of the Procurement Integrity Act by virtue of a former FAA employee's subsequent employment with the subcontractor of the awardee, OAO. Second, Anstec contended that the agency failed to evaluate proposals correctly and failed to perform a proper best value analysis. Finally, Anstec claimed the agency failed to conduct meaningful discussions with it. On November 29, 1994, FAA's contracting officer notified all offerors of the Anstec protest. Caelum's Intervention in Anstec's Protest On December 1, 1994, Caelum timely intervened in Anstec's protest as an intervenor of right. Caelum's intervention was filed eight working days after award. In its intervention Caelum stated: It is the position of Caelum that the award to Modern Technology Systems, Inc. was improper and that the Board should direct FAA to terminate the award to MTS. Caelum did not raise any other allegations or grounds of protest. Caelum did not file a separate protest within ten working days of contract award or within ten working days of Anstec's protest. At the hearing in this protest, Caelum's president explained that Caelum decided to intervene in Anstec's protest instead of filing its own because he did not know Anstec, he recognized the serious nature of a Procurement Integrity Act allegation, and he wanted to make sure that there was a basis for this allegation. Transcript at 2024-25. ----------- FOOTNOTE BEGINS --------- [foot #] 3 We deferred MTS' three motions to dismiss the protests as untimely. The final reply brief relating to these motions was not filed until January 19, 1995, three working days prior to the commencement of the hearing. The Board advised the parties that it would be unable to resolve those motions prior to the hearing, given the complexity of the issues involved, the possibility that amplification of the record would assist the Board, and the tight prehearing schedule. The parties adduced additional evidence at the hearing relating to these motions. ----------- FOOTNOTE ENDS ----------- Caelum's Responses to Interrogatories In response to an interrogatory asking when Caelum became aware of the facts in its intervention in Anstec's protest, Caelum stated, in pertinent part: On Tuesday, November 22, 1994, Larry Bennett of Management of American Consultants and Associates (MACA) and Bill Blocher of ANSTEC, Inc. called Michael Yeh of Caelum indicating that federal procurement integrity laws and regulations had been violated by the awardee, MTS, and OAO Corporation ("OAO"), the awardee's major subcontractor. The individuals indicated that a former FAA employee, Ruble Garner, had participated in this acquisition on behalf of FAA and then assisted MTS/OAO in preparing their proposal. These individuals also indicated that the relationship of MTS and OAO was more like a joint venture than that of a prime/subcontractor relationship. A violation of the federal procurement integrity laws and regulations would prohibit award to MTS. On Monday, November 28, 1994, Caelum was provided a debriefing by the . . . Contracting Officer. The Contracting Officer informed Caelum that there were no weaknesses nor deficiencies in Caelum's proposal. Caelum's cost/price proposal was only slightly higher than MTS's. Upon information and belief, Caelum's technical proposal was far superior to MTS's. Therefore, the best value to the Government, which was to be the basis for award, required that award be made to Caelum. On November 30, 1994, Caelum received a redacted version of Anstec, Inc.'s Protest to the GSBCA. The allegations contained in that Protest also helped form the basis for Caelum's intervention. Caelum's Response to MTS' Interrogatory No. 3. Disqualification of Caelum's Counsel On December 19, 1994, the Board granted MTS' motion to disqualify Shaw, Pittman, Potts & Trowbridge (Shaw, Pittman)[foot #] 4 as Caelum's counsel in this protest on the ground that a partner in the firm had previously represented MTS and might have acquired confidential and privileged information relevant to the instant protest -- in which Caelum's position is adverse to that of MTS. ----------- FOOTNOTE BEGINS --------- [foot #] 4 Shaw, Pittman was denied access to protected material due to the motion to disqualify. ----------- FOOTNOTE ENDS ----------- During a telephonic conference on December 20, 1994, Caelum's president introduced Caelum's new counsel, the law firm of Venable, Baetjer and Howard, and the Board granted new counsel access to protected material effective on that date. Counsel obtained the protected protest file on the following day, December 21, 1994. Caelum's First Protest On December 30, 1994, Caelum filed its own protest based upon information first learned during its new counsel's review of the protest file, and during depositions on December 22 and December 23, 1994. Complaint 4. In Count I, Caelum alleged a violation of the Procurement Integrity Act. This allegation was based upon a former FAA employee's involvement in this procurement as an FAA procurement official and subsequently as program manager for the awardee's subcontractor. Caelum alleged that this violation of the Procurement Integrity Act required the termination of the contract award to MTS/OAO as well as disqualification of the MTS/OAO team from future consideration for award. Id. 16. In Count II of its protest, Caelum alleged an improper best value determination. Caelum pointed out that its proposal was 4.05% higher technically than that of MTS, but only 3.6% higher in cost. Caelum claimed that because technical merit was more important than cost the source selection official's decision was not supported in the record. In addition, Caelum contended that it should have been determined to have a more complete, reasonable, and realistic price. Complaint 21. In Count III, Caelum alleged that FAA failed to conduct meaningful discussions with it, and treated Caelum in an unequal manner. In particular, Caelum alleged that the government officials testified during their depositions that they had been directed not to conduct discussions with any offeror who scored a "2," i.e., a satisfactory rating, or higher. Complaint 24. Caelum's Supplemental Protest On January 6, 1995, still within ten working days of new counsel's review of the protest file, Caelum filed a supplemental protest also based upon information first learned during the review of the protest file on December 21, 1994, and depositions taken between December 22, 1994, and January 5, 1995. In its supplemental protest, Caelum raised several grounds of protest. First, Caelum alleged a violation of the Procurement Integrity Act "not previously known to protester." Specifically, Caelum alleged that Mr. Garner, former chief of the FAA planning and support division, was determined by an FAA attorney to be a procurement official within the meaning of the Procurement Integrity Act and was, therefore, ineligible to assist OAO in this procurement. Supplemental Protest 12. Second, Caelum claimed that the agency violated the procurement integrity regulations at 48 CFR 3.104-11 in that the agency failed to investigate thoroughly a potential violation of the Procurement Integrity Act. In Count III, Caelum alleged that award to MTS violated the FAR prohibitions against organizational conflict of interest in 48 CFR 9.501 and 9.505. In Count IV, Caelum reiterated its best value allegations, but added allegations that significant discriminators were not included in the final source evaluation board (SEB) report. In Count V, Caelum alleged that the agency failed to follow the stated evaluation criteria in that it failed to conduct meaningful discussions with Caelum, deviated from the solicitation requirements in its evaluation of BAFOs, and deviated from the solicitation in its evaluation of costs. In Count VI, Caelum alleged that the agency improperly held post-BAFO discussions with MTS regarding MTS' net worth and financing. Facts Pertinent to the Procurement Integrity Allegation The Aeronautical Center The Mike Monroney Aeronautical Center (the Center) in Oklahoma City, Oklahoma, one of the largest federal procurement centers in the Southwest, is the central service and support facility for the FAA and Department of Transportation (DOT) and employs approximately 4,500 people. Transcript at 761-63. The Center has an annual procurement budget of approximately $250 million and purchases a wide variety of products and services to supply the FAA's national air space system, training, and major support services. Id. at 763. Mr. Garner's Career at the Center Between 1983 and his retirement in August 1993, Ruble Garner served as a manager in the Center at a GM-15 grade level. Transcript at 16. Mr. Garner's total career has been in the data processing field, not the acquisition field. Id. at 293-96, 1762. Beginning in approximately January 1992, Mr. Garner was "focused on retirement." Id. at 1751, 1772. He "was winding up" a thirty-five-year professional career and was also "very intent on leaving things in good order as he left FAA." Id. at 1724. For his last "couple of years" at FAA, Mr. Garner worked on a major reorganization incorporating a new project and information resources management (IRM) responsibilities for the entire Center into his division's structure. Id. at 1725. When Mr. Garner left FAA, no one filled his position. Id. at 1772. Mr. Garner's Responsibilities on the Predecessor Contract Between 1987 and 1988, Mr. Garner was a member of the source evaluation board for the predecessor FIPs contract which was awarded to KenRob.[foot #] 5 Transcript at 27. KenRob's subcontractor on the predecessor contract was OAO.[foot #] 6 The predecessor contract encompassed the same services at issue here. Between January 1991 and the fall of 1991, Mr. Garner was a branch manager in the personnel and financial information systems branch. Transcript at 16, 303. In this position, Mr. Garner had responsibility for the contract administration of the predecessor KenRob contract, a significant effort under his responsibility. Id. at 33, 56. Approximately two years into the KenRob contract, i.e., in about 1990, in an effort to save costs, KenRob severed its relationship with OAO. Id. at 312. FAA estimates that, as a result, approximately $750,000 a year was saved. Id. The organizations which used the KenRob contract within the Center wrote procurement requests against the contract, and Mr. Garner's branch coordinated those efforts for the Center. Transcript at 34. Each procurement request included a statement of work, duration, estimated skill level required, and estimated dollar value for the task. Id. at 35, 57. Mr. Garner reviewed the task orders pertinent to his organization, probably about twelve or fifteen a year. Id. at 306. Although Mr. Garner did not typically review KenRob's response to the Government's task proposal requests, he did see two to four cost proposals submitted by KenRob. Id. at 308. During the latter stages of the KenRob contract, he would see some of the monthly invoices from KenRob as well as accounting reports. Id. at 56. In a March 8, 1991, memorandum, Mr. Garner was designated as an alternate contracting officer's technical representative (COTR) for the KenRob contract. Protester's Exhibit 29; Transcript at 1189-90. Mr. Garner was an alternate COTR until February 1992. Transcript at 1204; Protester's Exhibit 27. In the fall of 1991, Mr. Garner became the division manager of AMI-100, the Planning and Support Division of AMI, the IRM arm of the Center. Transcript at 15-16, 24, 291. The AMI organization handles the IRM functions for the entire Center as well as for some additional DOT programs. Id. at 294. All FIPs- type procurements were supposed to go through the AMI organization. Id. at 414. Mr. Garner had overall supervision for personnel, accounting, marketing, and contract administration within AMI. Id. at 19. There were two suborganizations under his direction, AMI-110 and AMI-120. ----------- FOOTNOTE BEGINS --------- [foot #] 5 KenRob is a subcontractor to Caelum in the FIPs recompetition. [foot #] 6 OAO is a subcontractor to the awardee of the FIPs recompetition, MTS. ----------- FOOTNOTE ENDS ----------- AMI-110 was responsible for processing procurement actions for AMI, coordinating the AMI budget and handling marketing and contract administration, including monitoring delivery schedules, cost overrun situations, and requests for equitable adjustments. Transcript at 18-20. AMI-110 had access to the cost and pricing proposals submitted by the contractors performing the hundred or so contracts within its responsibility. Id. at 21. Mr. Garner's Role with Regard to the FIPs Recompetition The FIPs recompetition was the largest procurement at the Center for at least the last two years. Transcript at 1803-04. At the time he learned of the FIPs recompetition, Mr. Garner was the division manager of AMI-100, supervising thirty-five to forty employees. Id. at 53-54, 300. AMI-100 was responsible for developing the performance work statement (PWS) and specifications for the contract, polling the users of the contract to derive the government estimate, and moving the procurement request forward. Id. at 861. The director of the IRM branch, Leo Epperson, testified that Mr. Garner, with respect to the FIPs recompetition, had only "minimal" activities, for example, determining whether the requirements met his organization's needs in the microcomputer area. Id. at 1770. At that time Mr. Garner spent less than one hour a week on the FIPs contract. Id. Ms. Cooley, as branch manager of AMI-110, technical planning, was responsible for planning the FIPs recompetition. Transcript at 53-54. She was Mr. Garner's direct subordinate, and he prepared at least two performance appraisals for Ms. Cooley. Id. at 55. He was familiar with the work that she did; he talked to her several times a day. Id. at 55. Although AMI-110 was under Mr. Garner, Mr. Epperson tasked Ms. Cooley directly and independently. Id. at 1762-63. Ms. Cooley testified that when she came to AMI in December 1991 as the branch manager of AMI-110, she realized that the FIPs contract was going to be expiring and she knew it was time to start the reprocurement. Therefore, she "just took the ball and ran with it." Transcript at 1502; see also id. at 1549-50. She testified that Mr. Garner did not direct her to initiate that action, but that she knew by looking at the contract that she had to get started. Id. at 1503. Ms. Cooley also served on the SEB for the FIPs recompetition. Transcript at 336. Mr. Garner had no personal knowledge of her work on the SEB and never discussed it with her. Id. at 314. In the course of supervising Ms. Cooley, Mr. Garner reviewed estimates of the FIPs resources his managers would require from this contract and forwarded them to Ms. Cooley for inclusion in the Center totals. Id. at 391. At times he would discuss the FIPs recompetition and raise questions such as "how's it going," "I'm still waiting on the DPA," etc., and Ms. Cooley would report the status in staff meetings. Id. at 391-92. Mr. Garner did not recall discussing with Ms. Cooley details about the FIPs statement of work. Id. Ms. Cooley testified that she did not share source selection sensitive information with Mr. Garner. Id. at 1535. The contracting officer, Ms. Bachman, only recalled one discussion which she had with Mr. Garner regarding the FIPs procurement; in the March 1993 time frame when the agency was initially issuing the solicitation, she contacted Mr. Garner to ascertain the status of the DPA, and she said he probably was able to advise her of this. Transcript at 1110. The Procurement Request On July 17, 1992, the director of AMI, Mr. Epperson, circulated a procurement request to initiate the procurement action to award a new FIPs contract. Supplemental Protest File, Exhibit 31. The development of the procurement request was under the responsibility of Mr. Garner as head of AMI-100. Transcript at 76. This included the PWS, as well as the government estimate. Id. at 76-77. Ms. Cooley over the course of approximately a year gathered the information required for the procurement request. Id. at 62-63. The procurement request was signed by Mr. Epperson in his capacity as head of the IRM function for the Center. The procurement request was initialed by eight individuals including Mr. Garner. The initials of a representative from each division indicated that the division's requirements were being met by this procurement. Transcript at 1765. If no initials for a particular division were received, the procurement request would have been sent back and not approved. Id. at 1765-66. The procurement request indicated that the estimated acquisition cost for this procurement was $49,002,963.76 and separately estimated the base-year and the four option-year costs. Supplemental Protest File, Exhibit 31. The government estimate contained in the procurement request did not change. Transcript at 715, 892. The PWS was attached to the procurement request. The PWS described the scope of work and included a detailed description of each employee and skill level. Protest File, Exhibit 31. There were some changes between the PWS which was attached to the procurement request in July 1992 and the PWS that was ultimately issued as part of the solicitation in March 1993 and reissued in September 1993. Transcript at 892-900; Protest File, Exhibits 33, 34. Many of the labor categories remained the same, several were fine-tuned, and five new categories were added. Transcript at 892-900. Mr. Garner did not recall reviewing the procurement request for the FIPs recompetition. Transcript at 57. Nor did he recall initialing the procurement request; when asked whether he did, Mr. Garner testified: "The copy I was shown later in '93 has my initials on it as a coordinator of that package." Id. He continued: Q: Now, you weren't in the habit of initialing documents that you didn't review, were you? A. Yes, I'm coordinating on it, and one of my employees is on this that has--did a detailed review and that's what I look for. Q: And that was Ms. Cooley? A. Yes. Id. at 60. At the hearing, Ms. Cooley testified that if Mr. Garner had not initialed the procurement request, it would have gone forward nonetheless. Id. at 1639. However, during her deposition, Ms. Cooley testified that if Mr. Garner did not initial the procurement request, it would not have gone forward. Id. at 1640.[foot #] 7 Mr. Epperson credibly testified that he would not have signed off on the procurement request if Mr. Garner's or another AMI-100 manager's initials had not been there. Id. at 1765-66. According to Ms. Cooley, by his initials, Mr. Garner concurred that the procurement request was correct in form and format, included a price estimate, and a PWS and was correct mathematically. Transcript at 1742. Mr. Garner testified that his initials indicated that his organization had some interest in what was being acquired under the procurement request and that for coordination purposes his signature needed to be there. Id. at 318. The Attestation of Procurement Integrity On September 30, 1992, FAA's associate administrator, who was also the director of the Center, signed an Attestation of Procurement Integrity Certification as the "approving official." The attestation provided: I the undersigned approving official, personally attest that all persons identified below have executed a Procurement Integrity Certification and have been informed of their being designated as procurement ----------- FOOTNOTE BEGINS --------- [foot #] 7 At the hearing, Ms. Cooley stated that there were several inaccuracies in her deposition transcript. Transcript at 1640. The Board, based upon the demeanor of the witness and other testimony, credits her deposition testimony in this instance. There were several other inconsistencies between Ms. Cooley's testimony at trial and her deposition testimony. See e.g., Id. at 1647-50, 1663-64, 1666. ________ ___ ----------- FOOTNOTE ENDS ----------- officials for the procurement set forth on procurement request No. 2-06093 [the FIPs recompetition]. Protester's Exhibit 6. There followed a list of thirteen typewritten names with routing symbols, including that of Ruble G. Garner, AMI-100. The government witnesses uniformly testified that this attestation of procurement integrity certification was wrong in that not all of these individuals were procurement officials for the FIPs recompetition, and had not all been informed of their being designated procurement officials for this procurement. This error occurred because the person preparing the attestation simply copied the list of names from the procurement request. Transcript at 638, 645. Although the Center director who was also the source selection official (SSO) for the FIPs recompetition believed that the attestation was accurate when he signed it, he learned subsequently in connection with the protest that it was not. Id. at 796-97. All persons who might be deemed procurement officials at some date executed a general procurement integrity certification which became part of their official personnel files. Transcript at 1078, 1082-83. Mr. Garner executed such a general procurement certification. Respondent's Exhibit 43. There were also separate procurement integrity certifications related specifically to the FIPs procurement. Respondent's Exhibit 38; Transcript at 1083. All members of the SEB signed a FIPs- specific procurement integrity certification. Transcript at 1084; Respondent's Exhibit 38. Mr. Garner never signed a procurement integrity certification specific to the FIPs procurement. Transcript at 1091. Mr. Garner's First Request for a Legal Opinion: Between January and March 1, 1993 Mr. Garner first contacted an FAA counsel at the Center, Mr. Rodriguez, between January and March 1, 1993, orally requesting legal advice on his eligibility to interview for post- retirement employment. Transcript at 84, 330. Mr. Rodriguez told Mr. Garner to recuse himself from the FIPs recompetition. At that time, Mr. Garner also requested one of the managers in the acquisition organization to search the files for any document that he may have signed or that designated him as a procurement official, but the manager found nothing. Id. at 330-31, 360. Mr. Garner's Recusal from the FIPs Recompetition: March 1, 1993 Following this discussion with FAA counsel, Mr. Garner wrote the following memorandum dated March 1, 1993, to his supervisor, the director of AMI: Leo, I may have the opportunity to discuss future employment opportunities with contractors that may compete on government contracts, and I have been advised by legal counsel to document this action in writing. Although I have not personally participated in the preparation of the statement of work for the recompete of the Aeronautical Center ADP support contract (contract currently held by KenRob), I am requesting that my involvement in this contract and any others where the Office of Information Services has involvement be restricted. After I retire, should the opportunity for employment be available, I wish to be in a position to discuss my future with them. The following is a list of contractors that I may be discussing employment with. This list includes, but should not be limited to the following: KenRob FKW OAO Leo, I am requesting that you provide me a written response so documentation of this will be in our files should any questions arise during competition of procurement actions I may be involved with. Supplemental Protest File, Exhibit 32. The next day, after consulting FAA counsel, Mr. Garner's supervisor issued the following response: I have reviewed the memorandum requesting your involvement be restricted in the programming support recompete so that you may be allowed to seek employment in these areas after your planned near-term retirement. I understand that you are not involved in the recompete of the KenRob contract at this time. In the future, I request that you have Cheryl Cooley of your division act in your behalf on any issues that relate to this contract area. The reputation of the Office of Information Services is outstanding and I will depend on you to ensure that this reputation is supported as you end your government career and look forward for future opportunities. Supplemental Protest File, Exhibit 33; Transcript at 1767-68. Neither Mr. Garner's nor Ms. Cooley's responsibilities changed as a result of his recusal from the FIPs recompetition. Transcript at 336-37, 1771. Mr. Epperson informed all division managers of Mr. Garner's recusal but did not inform the contracting officer. Id. at 1768. The contracting officer was not aware that Mr. Garner had recused himself from the FIPs support services procurement until this protest. Id. at 936-37. Mr. Garner's "Cold Call" to OAO: March 2, 1993 Shortly after March 2, 1993, Mr. Garner made a "cold call" to OAO and inquired "as to whether there was an opportunity for [him] to be employed."[foot #] 8 Transcript at 88. He spoke with Georgine Terry, an employee in OAO's business development division. Id. at 88, 92. The solicitation for the FIPs recompetition was first issued on March 31, 1993.[foot #] 9 Id. at 90. Mr. Garner's call led to an interview with OAO on May 2, 1993. Id. at 92. Mr. Garner's Second Request for Legal Advice On April 22, 1993, an attorney for OAO sent a memorandum to Georgine Terry at OAO outlining employee restrictions affecting Ruble G. Garner.[foot #] 10 In that memorandum the attorney suggested that Mr. Garner notify his agency of the possibility of negotiations for future employment and seek a letter of approval. Intervenor's Exhibit 16. The memorandum recommended specific language to be included in such notification: I have become aware of potential employment opportunity as a consultant utilizing my professional skills. OAO Corporation has expressed interest in discussing with me the possibility of future employment. This company could not be substantially affected in any way by the performance of my official duties. I am not involved in any way with negotiations or supervision of any activity involving OAO. OAO is aware that it will receive no official or unofficial favors in connection with any employment negotiations we may undertake. ----------- FOOTNOTE BEGINS --------- [foot #] 8 Mr. Garner testified that his supervisor, Leo Epperson, suggested that he call OAO and gave him Georgine Terry's name there. Transcript at 103-04. However, Mr. Epperson did not recall that he suggested that Mr. Garner call OAO. Id. ___ at 1776-77. [foot #] 9 The solicitation was withdrawn due to lack of a DPA, but was reissued in virtually identical form on September 15, 1993. [foot #] 10 OAO waived the attorney-client privilege with respect to this document. Transcript at 404. ----------- FOOTNOTE ENDS ----------- During the remainder of my employment with the FAA, I will recuse myself from any matters which involve OAO in any way. Id. On April 28, 1993, Mr. Garner sent FAA counsel, Mr. Rodriguez, a request for legal advice which was virtually identical to the request suggested by OAO's counsel quoted above. Intervenor's Exhibit 15; Transcript at 408. FAA's Response to Mr. Garner's Second Request for Legal Advice By memorandum dated April 30, 1993, FAA's legal office responded to Mr. Garner's request for an opinion letter. Supplemental Protest File, Exhibit 34. In that response, which was drafted by Mr. Rodriguez, FAA concluded that Mr. Garner's interviews with private firms would not violate either 18 U.S.C. 207(a) or the Procurement Integrity Act, 41 U.S.C. 423(f)(1)(A), since Mr. Garner did not personally and substantially participate in a procurement action which resulted in the issuance of a solicitation which would lead up to an award of a contract to any of the interested firms. Transcript at 440; Supplemental Protest File, Exhibit 34 at 2. The April 30 memorandum was based only on the representations which Mr. Garner had made to FAA counsel. Transcript at 442. At the time he issued the April 30 memorandum, Mr. Rodriguez was not aware of the existence of the procurement request, the attestation, the FIPs recompetition, or Mr. Garner's recusal. Id. at 440-46, 450-51. FAA counsel made no effort to verify any of the representations in Mr. Garner's April 28 memorandum. Id. at 452, 488. Mr. Garner's Interview at OAO On May 2, 1993, Mr. Garner and his wife traveled to Greenbelt, Maryland, to meet with Ms. Terry and a vice president of OAO, Bill Hill. Transcript at 92-93. Mr. Hill had been involved in OAO's effort previously at the Center, when OAO was a subcontractor to KenRob. Id. at 93. At the time of the interview, Mr. Garner was still an FAA employee. Id. at 93-94. Mr. Garner met with Mr. Hill and Ms. Terry for approximately three to four hours, and OAO paid for the travel expenses related to the interview for Mr. Garner and his wife. Id. at 95. When asked whether he discussed the FIPs recompetition during his interview, Mr. Garner testified: A: Mr. Hill may have mentioned it. We didn't discuss any particulars about it. Transcript at 99. He continued: The only thing that I can recall that we discussed is that that was one of the things that they were considering bidding on. He was explaining about the OAO Corporation, and that happened to be one of the things that he mentioned in the conversation. Id. at 101-02. Mr. Garner testified that Mr. Hill and Ms. Terry did not discuss with him how he might participate in the recompetition effort. Id. at 102. Mr. Garner's First and Second Offers from OAO, "Proposal Facilitator" and "Transportation Consultant" In a letter dated May 25, 1993, OAO confirmed its offer "for the position of proposal facilitator to provide support for the DOT/FAA/Mike Monroney Aeronautical support services proposal." Protester's Hearing Exhibit 5. Mr. Garner understood this to refer to the FIPs recompetition. Transcript at 117-18. Upon receiving the initial offer from OAO for the "proposal facilitator" position on May 26,[foot #] 11 Mr. Garner telephoned the vice president of OAO and advised him that he had understood he was being hired for a broader position to help market OAO's capabilities throughout the transportation area. Transcript at 345. The vice president responded that "OAO had not just zeroed [in] on . . . the support services contract, but that they could use Mr. Garner in other aspects of OAO." Id. Subsequently, on May 27, Mr. Garner received a second letter via facsimile from OAO, also dated May 25, 1993, which offered him the position of "transportation consultant" instead of proposal facilitator. Protest File, Exhibit 51; Transcript at 347. When OAO sent him the second offer letter, OAO advised Mr. Garner to disregard and destroy the first offer letter. Transcript at 348. At the hearing, Mr. Garner testified to what a proposal facilitator was: The proposal facilitator is what I would call part of the responsibilities of a transportation consultant as I understood. It was one piece of the duties as I know them that would have been what I did working for OAO. Id. at 124-25. Mr. Garner admitted that "part of what [he] was [hired to do] was to assist OAO in the FIPs recompete." Id. at 125. ----------- FOOTNOTE BEGINS --------- [foot #] 11 The offer was sent via facsimile to Mr. Garner's church. Transcript at 342. ----------- FOOTNOTE ENDS ----------- MTS' President's Visit to Oklahoma City Mr. Garner met the president of MTS when she came to Oklahoma City.[foot #] 12 She was interested in opening an office in Oklahoma City, and Mr. Garner introduced her to a friend of his who manages an office building. Transcript at 162. She ultimately leased the space through his friend. Id. Mr. Garner believed that the rental was related to the FIPs recompetition effort. Id. at 163. Mr. Garner and his wife had dinner with the president of MTS while she was in Oklahoma City. Id. at 165, 1935-36. Mr. Garner's Employment at OAO Mr. Garner worked for OAO for three and one-half months, from August 16 through December 1, 1993. Transcript at 14. He commenced his employment the Monday following his retirement from the Federal Government. Id. at 15. Mr. Garner's salary at OAO was per month, or a year. Id. at 190. Mr. Garner spent his first two weeks on the job for OAO becoming familiar with OAO's work. Id. at 134. Mr. Garner reported to Mr. Hill. Id. Mr. Garner's Third Written Request for an FAA Legal Opinion: September 8 By memorandum dated September 8, 1993, Mr. Garner advised FAA counsel that he was currently employed by a firm who would be bidding on the FIPs contract and that the firm was anticipating proposing him as the program manager. He continued: My question is that should we be awarded this contract do you feel there would be any reason why I could not serve in this position since I worked [at the Center] in AMI prior to my retirement? I would appreciate a letter as to whether your office feels this would [be] considered a conflict of interest. Supplemental Protest File, Exhibit 50. Attached to the memorandum was a position description stating that the program manager would be "vested with all the authorities required to be ----------- FOOTNOTE BEGINS --------- [foot #] 12 The record contains inconsistent testimony as to when this meeting between Mr. Garner and MTS' president, Ms. Piper, occurred. Mr. Garner testified that Ms. Piper's visit occurred within two and one-half months after he began working at OAO, probably in September 1993. Transcript at 161, 162-65. Ms. Piper believed the meeting most likely occurred in July 1993, while Mr. Garner was still employed by FAA. Id. at 1771-76, ___ 1983-84. ----------- FOOTNOTE ENDS ----------- fully responsive to [the Center] to successfully execute the contract." Id., Exhibit 52. Receipt of this September 8 memorandum was the first that Mr. Rodriguez became aware of Mr. Garner's employment with a potential competitor on the FIPs recompetition. Transcript at 494. Mr. Garner's Trip to Oklahoma on Behalf of OAO After his first two weeks on the job in Greenbelt, Maryland, Mr. Garner went back to Oklahoma on behalf of OAO and attempted to obtain certain federal regulations from FAA. He was told he could obtain the regulations from the Government Printing Office. Transcript at 136. Between September 15 and 24, 1993, Mr. Garner stopped in to see the contracting officer and asked for two copies of the solicitation. Id. at 938, 1101. The contracting officer gave him the copies and he left; the meeting lasted for one to two minutes, and they did not discuss the acquisition. Id. at 1101, 1106. After this meeting, the contracting officer learned that Mr. Garner was working for OAO. Transcript at 1103. This information, coupled with her knowledge of the procurement request and attestation, prompted her to write a memorandum seeking legal advice. Id. at 1100-06, 1651-52, 1657. The Contracting Officer's September 24 Request for Legal Advice Mr. Rodriguez had not yet prepared a response to Mr. Garner's September 8 memorandum when he received a memorandum dated September 24, 1993, from the contracting officer. Transcript at 492-93. In this memorandum, the contracting officer asked FAA counsel whether "a procurement integrity violation" existed due to Ruble Garner's employment at OAO and his status as a procurement official. Supplemental Protest File, Exhibit 35. She pointed out that he reviewed and signed a procurement request, and that an attestation indicated that he was aware he was a procurement official. Id. The contracting officer believed Mr. Garner was a procurement official at the time she wrote her September 24 memorandum because the attestation identified him as a procurement official. Transcript at 1103-04. Mr. Rodriguez was assigned to respond to this memorandum. Transcript at 457. This is the first time that Mr. Rodriguez became aware that Mr. Garner had initialed the procurement request. Id. at 461. The contracting officer never received a response to her September 24 memorandum. Transcript at 945, 1105. Mr. Garner's Second Visit to the Contracting Officer Later during his September 1993 visit to Oklahoma, Mr. Garner accompanied Georgine Terry to see the contracting officer, who was also a member of the SEB and Mr. Garner's neighbor. Transcript at 136-38, 950. Mr. Garner testified that when he met with the contracting officer in mid-September he was not privy to whether OAO had decided to compete for the FIPs recompetition. Id. at 140.[foot #] 13 Mr. Garner and Ms. Terry's meeting with the contracting officer lasted approximately fifteen minutes. Id. at 1106. The contracting officer used this opportunity to seek clarification of a written question which MTS/OAO had submitted. Id. at 1107. The contracting officer testified that during this visit by Mr. Garner, she felt uncomfortable because Mr. Garner was her neighbor. Transcript at 949-50. The contracting officer discussed her concern about Mr. Garner being her neighbor with A. L. Haizlip in the legal department and he advised her orally that there were no problems.[foot #] 14 Id. at 951; Supplemental Protest File, Exhibit 36. The Contracting Officer's Memorandum to the File and Discussion with Counsel On October 7, 1993, the contracting officer wrote a memorandum to the file stating that she met with Mr. Garner and Ms. Terry on October 1, 1993, and "discussed the acquisition[;] OAO had submitted a question which I needed clarified." She continued: I am uncomfortable with this situation because Ruble Garner is my neighbor and we have discussed this acquisition when he was employed by the government and was a procurement official. These discussions involved the delegation of procurement authority and were because his office was the initiator of the requirement and Cheryl Cooley, the technical co-chairperson, was an employee of his. I expressed my concern and uncomfortable feeling to Patty Sparkman, acting manager, AMQ-500. She suggested that I discuss this matter with legal. ----------- FOOTNOTE BEGINS --------- [foot #] 13 After being shown a document, Mr. Garner changed his testimony to state that he must have known that OAO intended to bid on the FIPs recompetition by September 8. Transcript at 180. [foot #] 14 Mr. Haizlip was lead counsel for FAA in this protest. ----------- FOOTNOTE ENDS ----------- I discussed the situation with legal counsel who does not believe an impropriety exists, but has advised me to document the file. Supplemental Protest File, Exhibit 36. Mr. Rodriguez testified that until the hearing in this protest he was not aware of the fact that the contracting officer had expressed her discomfort because of Mr. Garner being her neighbor and the discussions he had with her. Transcript at 499. Mr. Rodriguez did not know the identity of the FAA counsel with whom the contracting officer discussed the situation. Id. at 500. The Red Team Without having received a response to his September 8 request for legal advice from FAA, Mr. Garner returned to OAO in Greenbelt, Maryland, on approximately October 3, 1993, and participated in a red team effort along with other employees of MTS and OAO. Transcript at 149, 169; Deposition of Phillip Davis (Davis Deposition) (Dec. 23, 1994) passim. Mr. Garner spent three days, and no less than twenty-four hours, on the red team effort. Transcript at 169. The function of the red team was to review the MTS/OAO proposal[foot #] 15 and provide comments, feedback, and direction. Davis Deposition at 15, 32. The red team consisted of approximately individuals. Transcript at 171. At one time during the red team effort, Mr. Garner sat next to the president of MTS. Id. The red team noted comments on the draft proposal and also filled out forms which contained space for comments and suggestions. Id. at 17, 34, 1939-40. Mr. Garner was put on the red team because having come from the Center, he had the "local color knowledge," and could "make sure that [MTS/OAO does] not say things that are stupid in our proposal." Davis Deposition at 381; see also id. at 10; Transcript at 1934. Mr. Garner explained his role on the red team: [W]e came into the room, we were given copies of parts of the solicitation and sections of the technical proposal, I think it's called technical proposal, and my duties was [sic] to read that and see if I understood what the proposal was saying, and that's what I did, looking at how it -- how I'd review it if I was back in Oklahoma City. ----------- FOOTNOTE BEGINS --------- [foot #] 15 The technical/management volume of MTS' proposal was a collaborative effort between MTS and OAO. Davis Deposition at 13. ----------- FOOTNOTE ENDS ----------- Q: Back in Oklahoma City on the source evaluation board? A: Or something like that, you know, so it could be better understood critiquing the wording and the phraseology and stuff that I would [have] understood if I was looking at it. Transcript at 173. Mr. Garner made both oral and written comments on the draft proposal. Id. at 175-76. While he was participating in the red team, Mr. Garner understood that OAO might be proposing him as program manager for the FIPs recompetition. Transcript at 184-85. However, OAO's proposal manager had a different understanding -- that OAO considered proposing Mr. Garner as OAO's site manager for the contract. Davis Deposition at 22. The site manager would be OAO's local manager "that has responsibility for the OAO employees that are on the contract and provide support to MTS' program manager." Id. at 22. Mr. Garner was considered for that position because he was "a senior manager, experienced, and knows the customer certainly." Id. at 23. MTS' president testified that if Mr. Garner had been proposed for program manager it would only have been for OAO's effort in the procurement. Transcript at 1952. MTS had never considered Mr. Garner as a potential program manager for MTS on this procurement. Id. at 1953. During Mr. Garner's presence on the red team, there was no discussion about the cost estimates for the work to be done. Transcript at 188. Mr. Garner was not involved with the cost estimate. Id. at 189. Mr. Garner never discussed the estimated acquisition costs of this procurement with anyone from MTS or OAO. Id. at 323. MTS' president testified that she knew of no discussions between OAO and Mr. Garner regarding source selection sensitive issues or the government estimate. Id. at 1959. Although OAO's technical/management proposal manager could not recall the specifics of Mr. Garner's red team comments, he "was not impressed with them or did not find them to be particularly insightful." Id. He described Mr. Garner's participation in the red team as follows: . . . Mr. Garner's contribution through that process was minor type of issues, terminology that may have been used incorrectly, names of things that were incorrect [or] acronyms. I do not specifically remember, but it was that level of minutiae, if you will. Id. In the view of MTS' president, Mr. Garner's comments "were not substantial" and had no impact, but "he did make some recommendations about acronyms." Transcript at 1944. MTS' president did not recall incorporating any of Mr. Garner's comments into the proposal. Id. at 1947-48. The October 5 SEB Minutes During a meeting of the SEB on October 5, 1993, concerning the FIPs recompetition, the contracting officer indicated that she had forwarded a letter to counsel regarding a "possible procurement integrity violation," and no response had been received. Protest File, Exhibit 37. The contracting officer herself prepared the minutes of the SEB meetings of October 1 and October 5, 1993. Transcript at 954; Protest File, Exhibit 37. FAA Counsel's Response to Mr. Garner's September 8 Request for Legal Advice: The October 14 Letter By letter dated October 14, 1993, FAA counsel responded to Mr. Garner's request of September 8.[foot #] 16 In that letter, FAA counsel advised Mr. Garner that his proposed participation as a project manager on a future contract between OAO and FAA would constitute a violation of the procurement integrity regulations. Supplemental Protest File, Exhibit 52. FAA counsel concluded that the Procurement Integrity Act and regulations prohibited Mr. Garner from participating in the procurement on OAO's behalf because he had been a procurement official on this procurement. Counsel explained: An agency employee becomes a procurement official if he or she participates personally and substantially in drafting a specification developed for the procurement, or reviews or approves a specification developed for the procurement. . . . Our review of procurement documents and available information disclosed that you have participated as a procurement official in the procurement for ADP support services. The contracting officer's file reveals that you executed a Procurement Official's Certification on or about September 30, 1992. You also reviewed and initialed the Procurement Request dated July 17, 1992, for the procurement of these support services. These actions strongly suggest that you participated personally and substantially in the review and approval of the specifications or requirements for the procurement. This is an activity that the Procurement Integrity regulations associate with a procurement official (48 CFR 3.104-4(h)(1)). Your voluntarily signing the Procurement Official's Certification is ----------- FOOTNOTE BEGINS --------- [foot #] 16 The letter was signed by Mr. Standell, Mr. Rodriguez' supervisor, but was drafted by Mr. Rodriguez after consultation with Mr. Standell. Transcript at 512. The letter represented both Mr. Standell's and Mr. Rodriguez' opinions. Id. ___ ----------- FOOTNOTE ENDS ----------- further acknowledgement of your status as a procurement official in this matter. . . . It is our opinion that as a procurement official, you are prohibited from participating in contract performance on behalf of OAO, a competing contractor, or any other contractors submitting an offer for the ADP support services. The prohibition applies for a 2 year period, extending from the date of your last personal and substantial participation in the procurement process. This ban applies to your proposed position as Program Manager, as well as to any other form of participation on behalf of OAO. . . . Accordingly, we suggest that you decline the offer to perform contract services on behalf of OAO or any other competing contractor for this procurement. Id. The contracting officer was not informed of this opinion until this protest. Transcript at 946. Mr. Garner's Discovery of the Attestation of Procurement Integrity Mr. Garner testified that the first time he saw the attestation was in the middle of October 1993 when OAO asked FAA counsel for a ruling on using him in the performance of this contract and FAA counsel produced a redacted version of the attestation. Transcript at 79.[foot #] 17 OAO's Reaction to FAA's October 14 Legal Opinion As a result of the FAA's October 14, 1993, opinion letter, OAO decided not to propose Mr. Garner as site manager, and OAO's proposal manager distanced himself and the proposal activity from Mr. Garner. Davis Deposition at 24. OAO Counsel's Request for Reconsideration By letter dated October 27, 1993, OAO's counsel formally requested reconsideration of the FAA's determination that Mr. Garner's participation as a program manager would violate the procurement integrity regulations. Supplemental Protest File, Exhibit 54. ----------- FOOTNOTE BEGINS --------- [foot #] 17 Mr. Garner testified that as best he could recall he was a procurement official on three occasions, not including this one -- the original KenRob contract, another procurement for which he was on the SEB, the OATS contract, and the renegotiation of the KenRob contract. Transcript at 80. ----------- FOOTNOTE ENDS ----------- FAA's Denial of Reconsideration By letter dated November 3, 1993, FAA counsel denied the request for reconsideration, stating: There is some merit to your argument that the appearance of Mr. Garner's name in the 'Attestation . . .' does not directly establish his status as a procurement official.[[foot #] 18] However, we are convinced that Mr. Garner's initials on the Procurement Request reflects (sic) his personal and substantial participation in the procurement process, as defined by the regulations . . . . His review and approval of the Procurement Request amounts to a participation in its preparation, since, without his participation, the document would not have been approved or sent forward for final signature by Mr. Garner's former supervisor . . . . Supplemental Protest File, Exhibit 56. OAO and Mr. Garner agreed that Mr. Garner would cease his employment with OAO as of December 1, 1993. That agreement was fulfilled. Transcript at 14; see, Davis Deposition at 58. The Re-emergence of the Procurement Integrity Issue in March 1994 The issue of whether Mr. Garner was a procurement official was raised again in March 1994, when the certifications and representations submitted by OAO in MTS' BAFO indicated that OAO had employed Mr. Garner. Transcript at 114, 522; Supplemental Protest File, Exhibit 38. The minutes of an SEB meeting on the FIPs procurement on March 3, 1994, reflect that the SEB discussed the procurement integrity issue regarding OAO: [MTS'] subcontractor (OAO) indicated a possible violation in their representations and certifications. Specifically, they indicated that they have employed Ruble Garner (a former FAA employee) and that Mr. Garner assisted them in the preparation of their subcontract proposal. They further indicated that FAA has rendered an opinion that Mr. Garner cannot be proposed as key personnel and he has not been so. They further stated that Mr. Garner's limited participation in the preparation in the subcontract proposal complies ----------- FOOTNOTE BEGINS --------- [foot #] 18 A few days before testifying at the hearing, Mr. Rodriguez was told by the contracting officer that the procurement integrity attestation was inaccurate in that Mr. Garner had not been informed that he was a procurement official as reflected on the attestation. Transcript at 622. ----------- FOOTNOTE ENDS ----------- with and is authorized by the Procurement Integrity Act. . . . Mr. Garner no longer works for OAO. [The CO] asked Ms. Douglas to discuss the situation with [counsel] and to provide the SEB with a determination. Supplemental Protest File, Exhibit 38 at 2. On March 24, the counsel identified in the minutes, Ms. Douglas, approached Mr. Rodriguez with this issue. Transcript at 533. Mr. Rodriguez in turn discussed the issue of Mr. Garner with Mr. Haizlip, FAA's counsel in this protest, in generic terms, without mentioning any proper names, names of parties, or descriptions of procurement. Id. at 534. Contacts were then made with the three other attorneys and "based on those conversations [Mr. Rodriguez concluded] that the matter of Mr. Garner's participation by way of his concurrence on a procurement request was not a substantive participation in a procurement action." Id. at 538. The generic request forwarded to these individuals questioned whether a former FAA employee's initialing of a procurement request was a personal and substantial participation in a procurement action. Id. at 552. No other facts were included in the generic scenario. Id. at 623. The generic scenario was never reduced to writing. Id. at 540. FAA counsel did not interview Mr. Garner. Id. at 557. One of the three individuals FAA counsel intended to contact was the FAA senior ethics official, John Walsh, in Washington, DC, to obtain his opinion regarding Mr. Garner. Prior to contacting Mr. Walsh, Mr. Rodriguez drafted a memorandum in anticipation of what Mr. Walsh's opinion would be. Respondent's Exhibit 32; Transcript at 565. That draft memorandum purported to respond to counsel's request for comments regarding a "procurement integrity question regarding assistance on development of subcontractor's proposal." Respondent's Exhibit 32. The memorandum concluded: Based on our review of the procurement integrity legislation . . . and the resultant procurement regulation . . . we can find no authority that specifically prohibits such conduct. I, along with A. L. Haizlip of this office, discussed this matter with John Walsh, the senior attorney for ethics of the FAA chief counsel's office. Mr. Haizlip forwarded an E- mail message to Mr. Walsh, which outlined your scenario (without using specific identities; copies attached).[[foot #] 19] Mr. Walsh had reviewed similar procurement situations in the past. On March 25, 1994, Mr. Walsh commented that he could find no authority which directly prohibits a procurement official from assisting a competing contractor (or a subcontractor thereof) in the ----------- FOOTNOTE BEGINS --------- [foot #] 19 This E-mail message no longer exists. ----------- FOOTNOTE ENDS ----------- development of a proposal for the procurement on which that person had personally and substantially participated. . . . Based on the foregoing, there appears to be no defect in the proposal's procurement integrity certificate requiring rejection or amendment. Id. Because Mr. Walsh's advice was inconclusive, however, that memorandum was never sent. Transcript at 565-66. The two FAA counsel, Messrs. Haizlip and Rodriguez, had a five- to ten-minute telephonic conversation with Mr. Walsh. Transcript at 568. Mr. Walsh recalled telling Mr. Haizlip "that I didn't have time to sort through that problem and give him my advice. And he accepted that graciously." Deposition of John T. Walsh (Walsh Deposition) (Jan. 31, 1995) at 24. Messrs. Haizlip and Rodriguez then contacted another attorney, Mr. Salgado, in the FAA chief counsel's office in Washington, DC; he stated that the initialing of a procurement request by an official was routine, perfunctory participation rather than substantial. Transcript at 600. The third attorney contacted, Professor Hagberg, also believed initialing a procurement request was routine and perfunctory and not personal and substantial participation. Id. at 601. Based upon these contacts and his own review of the FAR, Mr. Rodriguez changed his decision and concluded that Mr. Garner did not have personal and substantial involvement in the procurement. He realized that he had issued two contrary opinions, but reexamined the matter because it was a very close question and something with which he had struggled. Transcript at 547-48. No independent investigation as to whether a possible procurement integrity violation had occurred was undertaken either by FAA counsel or the contracting officer. Transcript at 557, 958-59. Neither Mr. Haizlip nor Mr. Rodriguez is responsible for implementing the provisions of FAR 3.104-11 or investigating procurement integrity violations. Protester's Hearing Exhibits 27, 28; Transcript at 555. The March 1994 Revised Legal Opinion FAA counsel answered orally and in generic fashion the contracting officer's request about the possible procurement integrity violation in OAO's certification. Transcript at 609. In a memorandum to the file dated March 28, 1994, the contracting officer stated: A. L. Haizlip, AMC-7, contacted me and advised that a procurement integrity issue did not exist regarding [MTS'] subcontractor's notice in section K of the solicitation of a possible violation. Mr. Garner was not considered to be a procurement official on this acquisition because he had not 'participated personally and substantially.' An agency opinion regarding this situation had been received from AGC-110. Mr. Haizlip advised that he would send something in writing. Supplement Protest File, Exhibit 39. AGC-110 referred to FAA's ethics office in Washington, DC, i.e., Mr. Walsh's office. Transcript at 1029-30. During her deposition, the contracting officer testified as follows regarding her conclusion that Mr. Garner was not a procurement official: Q The next sentence reads that Mr. Garner was not considered to be a procurement official on this acquisition because he had not participated personally and substantially. What is the basis for making that sentence? A That was information provided to me by Mr. Haizlip. Q So that was not your conclusion? A No. Transcript at 1157. The contracting officer further testified that she agreed with counsel's conclusions. Id. at 1158. The Source Selection Official was not Informed of the Procurement Integrity Issue The SSO was the Center director and the Head of Contracting Authority (HCA). At the time the SSO made his decision to award the contract to MTS, he was not informed of any concern relative to the procurement integrity statute. Transcript at 529, 559, 644-45, 1680. The SSO testified that if the contracting officer, with input from the Center's legal department, had determined that a possible violation of procurement integrity existed he would have expected her to advise him of that; he depended upon his contracting officers and legal department to determine which allegations were serious enough to bring to his attention. Id. at 801, 804. The contracting officer admitted that she did not inform the HCA of the possible procurement integrity violation or conclude whether that possible violation had any impact on the procurement as required by FAR 3.104-11. Transcript at 963-64. At the hearing she claimed she did not do so because the matter was only a "concern" which did not rise to the level of a possible violation. Id. at 964, 1125. However, the contracting officer had in her written memorandum and SEB minutes characterized the procurement integrity issue as a "possible violation." Id. at 940-41. The contracting officer testified in response to a question by MTS' counsel as follows: Q How would a concern become a violation or a potential violation? A I just followed -- I would not have -- to me there is a concern but to determine whether it is a possible violation or a violation, I would not want to report that until I was sure that it had reached that stage. That -- there is a distinction to me, and until I was sure whether it had reached that, to me, it was a concern because we never knew whether there was a violation or possible violation. Q Well, how would it ever reach that level? A Information provided, a determination. Q What kind of information? A If it had been determined that he was a procurement official. Q What would that depend on? A That would depend on investigations to see his participation in this procurement. Id. at 1126[foot #] 20; see id. at 941-42. She further stated that the concern was resolved in her mind when she had the discussion with counsel on March 28, 1994. Id. The Freedom of Information Act (FOIA) Request In response to a FOIA request, FAA released all of KenRob's hourly composite rates through January 18, 1993, to some offerors in the recompetition. Respondent's Exhibit 39; Transcript at 1133. Also included were representative task orders issued under ----------- FOOTNOTE BEGINS --------- [foot #] 20 The Board finds this testimony not to be credible. On prior occasions the contracting officer in writing characterized Mr. Garner's involvement as a possible violation -- her September 24 memorandum, the October 5, 1993, SEB minutes, ("a possible procurement integrity violation"), the March 3, 1994, SEB minutes ("OAO indicated a possible violation in their representations and certifications"). Supplemental Protest File, Exhibits 35, 37, 38; see also Transcript at 1667-69. ________ ----------- FOOTNOTE ENDS ----------- KenRob's contract. Id. The task orders reflected unit prices for different skill categories. Id. OAO had filed a FOIA request for a copy of the KenRob contract, all the amendments, and the "sell rates for all the skill levels." Transcript at 1134-35; MTS Hearing Exhibit 9. Management Assistance Corporation of America (MACA) and Anstec, other offerors in this procurement, and MTS also received copies of the KenRob contract. Transcript at 1129-36, 1928-29. Facts Relating to the Evaluation and Award The Solicitation On March 31, 1993, FAA issued solicitation number DTFA-01-92-R-00908, seeking proposals for FIPs services for the Center. The procurement was to be a small, minority-owned business set-aside competition under the Small Business Administration's 8(a) program. Protest File, Exhibit 1 at 66, 98. The procurement sought a follow-on contract to the Center's existing contract with KenRob for FIPs services after the incumbent contract expired. Id., Exhibit 28 at 6. On August 19, 1993, FAA canceled the solicitation because it had not obtained a DPA. On September 15, 1993, after the FAA obtained a DPA, the solicitation was reissued as solicitation number DTFA-02-93-R-00905. Protest File, Exhibit 6 at 7. The solicitation requires the contractor to provide FIPs support services described in the PWS attached to the RFP. Protest File, Exhibit 6 at 23, 77-113. Section B of the RFP contains a list of twenty-seven personnel skill categories, along with the FAA's estimated annual hourly requirements for each category. Id. at 13-14. The skill categories encompass occupations requiring automatic data processing type skills, including programmers, systems analysts, telecommunications specialists, computer operators, and librarians. Id. The offerors were required to propose, for the contract's base year and the four option years, fixed hourly composite rates for each of the twenty-seven categories listed. The aggregate total price of the fixed hourly rates for the twenty-seven categories multiplied by the RFP's estimated annual hours, for each of the five contract years, represented each offeror's proposed price. Protest File, Exhibit 6 at 13-22. Section F.3 of the RFP states that the FIPs contract includes a forty-five day transition period, but allows the FAA to alter the time frame for transition. Protest File, Exhibit 6 at 24. The solicitation contained the requirement for a certificate of procurement integrity. Id., Exhibit 6 at 36-37, 52-53. Section L of the RFP required the offerors to submit separate technical and cost proposals. Protest File, Exhibit 6 at 63. The cost volume was to include an executed Standard Form 1411, "Contract Pricing Proposal Cover Sheet," for each contract year, along with supporting cost/pricing data for all proposed line item prices. In addition, offerors were required to provide cost element breakdowns for the labor hour contract line items. Id. at 67. Section L.4 of the RFP provided in pertinent part: "Offerors are instructed to prepare pricing proposals in sufficient detail to permit a thorough and complete evaluation by the Government." Protest File, Exhibit 6 at 67. Paragraph L.4(b) included the following requirement for price/cost proposals: Offerors shall submit company financial statements for the two previous fiscal years. Audited statements shall be submitted if available. Financial statements shall include balance sheets and income statements. Protest File, Exhibit 6 at 67. Section M, Paragraph M.1, Introduction, provided in pertinent part: (b) Each proposal will be evaluated on the basis of its technical and price/cost proposal, technical being slightly more important than price/cost. . . . . (d) Technical proposals will be evaluated, rated, and scored in accordance with a pre-established evaluation plan. The categories of evaluation are listed in Provision M.2 in descending order of importance. Likewise, the major factors identified within each category are listed in descending order of importance. (e) Price/cost proposals will not be rated or scored but evaluated on the basis of completeness, reasonableness, and realism. (f) The offer that provides the overall greatest value to the Government will be selected. Therefore, the successful offer may not necessarily be the lowest priced offer. Technical competency is slightly more important than price. However, price may become relatively more important as the difference in technical scores decreases. . . . . (h) The Government reserves the right to award a contract based on initial offers received, without discussions or negotiations. Protest File, Exhibit 6 at 71. Paragraph M.2, Technical Evaluation, provided: (a) Selection of a contractor for award will be based on evaluation of technical proposals according to the following six categories which are listed in descending order of importance: (1) Experience and Past Performance (2) Program Management (3) Staffing (4) Understanding the Requirement (5) Transition Plan (6) Risk to the Government (b) Category 1 is slightly more important than Category 2 and Category 2 is slightly more important than Category 3. Category 3 is approximately twice as important as Category 4 which is approximately twice as important as Category 5. Category 5 is approximately twice as important as Category 6. Major factors within each category will be rated by the evaluation team on a rating scale as follows: 4 = Excellent; 3 = Good; 2 = Satisfactory; 1 = Fair; and 0 = Unsatisfactory. Team ratings for each major factor will be weighted to establish a score for each category. . . . The technical proposal will be evaluated as a whole document. Therefore, information among the major factors that is relevant may be considered by the evaluation team. Protest File, Exhibit 6 at 72. Category 6, risk to the Government, stated: The FAA will evaluate each technical proposal based upon perceived risks to the government inherent in award to each offeror. Areas evaluated will include, but not be limited to, technical competence, program management, understanding of the FAA requirements, and the presence of a sound plan to ensure continuity of operations and quality performance. Protest File, Exhibit 6 at 67. Paragraph M.3 provided that price/cost proposals would be evaluated but not numerically scored in the following areas: Completeness - Review of the proposal to ensure data provided is sufficient to allow complete analysis and evaluation of proposed costs and includes all information required by L.4. Reasonableness - Review of rationale and data supporting elements of cost included in the proposal. Realism - Overall review of proposal cost elements and estimating methodologies employed to determine whether the resulting prices are realistic based on the performance described. Protest File, Exhibit 6 at 74. The Technical Evaluation Plan The technical evaluation plan described the possible technical ratings as: Protest File, Exhibit 7 at 4. The technical evaluation plan was not revealed to offerors. Transcript at 1435. The contracting officer acknowledged that with respect to a satisfactory rating of 2.0, weaknesses could be present. Transcript at 1161. The technical evaluation plan addressed "discussions" and stated: If it is determined that discussions are necessary prior to award, such discussions will be held with all offerors within the competitive range based on weaknesses and deficiencies reported to the SEB and/or the Contracting Officer. Protest File, Exhibit 7 at 3 (emphasis added). The technical evaluation plan did not instruct evaluators that in performing the final evaluation they were not to evaluate any information that was previously rated "2" or higher. Protest File, Exhibit 7. Rather, the plan stated: Upon receipt of best and final offers, the TET will conduct final evaluations of each proposal. All supplemental information or revised proposals shall be analyzed taking into account any impact on other aspects of the proposal. Protest File, Exhibit 7. The Evaluation and Award Process Proposals were submitted on November 23, 1993. Transcript at 1937. The FAA's Technical Evaluation Team (TET) evaluated technical proposals, and the Price Evaluation Team (PET) evaluated cost proposals. Protest File, Exhibit 28. In its evaluation of each offeror's personnel compensation, the TET Transcript at 1463, 1465. The TET did not consider that Caelum's rates were lower in certain categories than the incumbent's rates. Id. at 1393. After evaluation of initial proposals, five offerors were determined to be in the competitive range. Protest File, Exhibit 17. The technical scores and prices, after evaluation of initial proposals, for the five offerors in the competitive range were as follows: Offeror Technical Score Price Caelum MACA Anstec PDS Protest File, Exhibit 28 at 10. Discussions The Center had a policy of not conducting discussions in any procurement with any offeror regarding a technical subfactor for which the offeror had received a "2" or better. Transcript at 991, 995. This was also the contracting officer's policy. Id. In her fourteen years as a contracting officer, the contracting officer never held technical discussions with any offeror in any technical subfactor which was rated a "2" or better. Id. at 996-97. This Center policy was unwritten as far as the contracting officer knew. Id. at 992, 995. Following this policy, the contracting officer only held discussions if there were weaknesses or deficiencies reflected in a score of less than "2," "bar nothing." Id. at 994. By letter dated May 6, 1994, FAA advised Caelum it was in the competitive range and that oral discussions would be held. Protest File, Exhibit 20. The letter further stated: Negotiations are being conducted to seek clarifications and to discuss the following weaknesses, and any other items that may arise: 1. Solicitation Issues: a. Since pages 2 through 11 were retyped, confirmation is required that no exceptions were taken to the solicitation. b. Section K, Representations, Certifications, and Other Statements of Offerors, Clauses 52.222-22, Previous Contracts and Compliance Reports and 52.222-25, Affirmative Action Compliance. A negative response was made to these clauses. These clauses are applicable to prime and subcontractors with 50 or more employees and a contract or subcontract of $50,000 or more. The required compliance reports and written affirmative action program must be developed within 120 days from contract award. Id. The only other issues in the letter were related to cost/price. Id. MTS received a similar letter; the only technical issues mentioned were: 1. Solicitation Issues: a. On Page 1a, the section entitled Subcontractor needs to be completed, i.e., signature, date, name and title. b. Since pages 2 through 11 were retyped, confirmation is required that no exceptions were taken to the solicitation. Protest File, Exhibit 20. Id. However, MTS was advised that its financial statements were not certified and that OAO had submitted financial statements for 1990 and 1991, instead of for 1992 and 1993. Id. In May 1994, after the evaluation of initial proposals, the FAA held discussions with the five offerors in the competitive range. Protest File, Exhibits 20, 21. Discussions regarding each offeror's technical proposal were limited to those factors which had been evaluated as less than "satisfactory," i.e., receiving a score of less than "2." Transcript at 991-97, 1142, 1143. This decision was based upon the longstanding Center policy which had been applied to all negotiated procurements the contracting officer ran. Id. No technical discussions were held with Caelum or MTS because they had received a "2" or higher in all technical subfactors. Transcript at 1003, 1425-26. One member of the TET testified that Caelum had weaknesses and deficiencies, but that none of them were significant. Id. at 1438. Technical discussions were held with Anstec and PDS. Protest File, Exhibits 20, 24. During discussions, the contracting officer informed offerors that at BAFO FAA would only evaluate factors in the technical proposals that had been rated less than "2" or that had significant weaknesses or deficiencies. Transcript at 1432-33, 1436-37. Caelum did not protest this procedure for evaluating BAFO proposals. Transcript at 1148, 1441-42. The Request for BAFOs By letter dated July 27, 1994, FAA issued amendment three to the solicitation and requested BAFOs for all offerors in the competitive range. The letter stated: Any revisions, clarifications, amplifications, or additional information that you believe to be necessary or that may have been noted during discussions/negotiations must be provided in the form of replacement pages for Volumes I and II. Protest File, Exhibit 22. The letter further specified that "any major revisions or major redirection of effort constituting a rewrite of the proposals will not be accepted." Id. Evaluation of BAFOs The TET, following instructions by the SEB and the contracting officer, did not evaluate any technical information in BAFOs if it dealt with a technical subfactor that had received a score of a "2" or higher. Transcript at 997, 1003, 1376-77, 1427, 1460-61; Supplemental Protest File, Exhibit 44. Because neither MTS' nor Caelum's initial technical proposal included any areas scored below "3," the TET did not reevaluate either offeror's technical BAFO. Therefore, the scores MTS and Caelum received on their BAFO technical proposals remained the same as the scores on their initial proposals. Protest File, Exhibits 15, 24; Transcript at 1389-90, 1425-26, 1459. The Cost Evaluation In its BAFO, Caelum included a letter dated July 2, 1994, from Patriot National Bank, committing to provide Caelum some in working capital. Protest File, Exhibit 11 at 693-97. The PET reviewed cost and pricing data for completeness, consistency, and accuracy. It also analyzed the proposed labor overhead rate for realism and consistency with related proposed cost elements (i.e., compensation bonuses and awards, fringe benefits, taxes, training costs, and site costs) and analyzed the proposed G&A rate (i.e., corporate overhead) for realism and the proposed overtime practices for consistency with related proposed costs, any uncompensated overtime, and an assessment of resulting labor rate dilution. Transcript at 1231-32, 1306-08, 1331-38; Protest File, Exhibits 16, 25. The cost realism analysis consisted of a Id. at 1231-32. Id. at 1233. Id. at 1232. The PET concluded that, based on its cost realism analysis of cost proposals in the competitive range, each offeror's price was complete, reasonable, and realistic. Protester's Exhibit 25. The PET chairman testified that the reasonableness of the offerors' prices was established by the substantial price competition in this procurement. Transcript at 1338-39. Id. at 1354. Based on its analysis of cost proposals, the PET had "an average level of confidence regarding the cost and pricing data" in the Caelum/KenRob proposal. The PET had "an average to above average level of confidence regarding the cost and pricing data" in the MTS/OAO cost proposal. Protest File, Exhibit 28; Transcript at 1264. According to MTS' expert witness, there were adequate costs in both the MTS and Caelum cost proposals to deliver the services described in the technical proposals, by focusing on employee compensation and its impact on employee recruitment and retention. Transcript at 1888. The cost team examined whether the contractors were financially capable of meeting the working capital requirements of the contract. Transcript at 1311. In other words, did they have enough payroll flow to meet the payroll needs until the case flow from the contract would start up? Id. The overriding consideration Id. at 1320. The Draft SEB Report On September 18, 1994, the SEB prepared an initial draft of the SEB final report. Under the section entitled Significant Discriminators Among Proposals, it stated that Caelum's salary range was the most competitive of all the offerors. Protester's Hearing Exhibit 16. Id. Both the draft SEB report and the final SEB report contained the following description of Caelum's financial condition under the cost evaluation: [Caelum's] financial condition is per Dun and Bradstreet. The unaudited financial statements submitted reflected a net worth of for the period ending March 31, 1994. However, Caelum provided a copy of a letter of commitment from a bank in Reston, Virginia referencing a working capital of In addition, Caelum provided a copy of a promissory note from a different bank in the amount of but it was not signed by the lender and it did not reference any working capital for this contract. Their subcontractor's, KENROB, financial condition was rated as by Dun and Bradstreet in August 1994, with an audited net worth of as of December 31, 1992. Protest File, Exhibits 16, 28. The draft SEB report of September 28, 1994, in the cost section, stated that Protester's Hearing Exhibit 16; Transcript at 1042. The SSO did not see the SEB's draft report. Transcript at 693. The Request for Post-BAFO Information from MTS The cost team Transcript at 1241-42. In a memorandum to the file dated October 4, 1994, the contracting officer stated: Re: Determination of Responsibility/Eligibility I contacted Mr. Roy Jenkins, SBA . . . regarding FAR 19.809, Preaward considerations. . . . I explained a possible situation; e.g., if a firm was determined financially incapable of performing when would this be referred to SBA, before a selection has been made by the SSO or after a selection has been made by the SSO. Second, I asked whether financial capability was a part of SBA's determination of eligibility. Mr. Jenkins advised that any negative preaward findings should be referred to SBA after a selection is made by the SSO. Second, Mr. Jenkins explained that SBA does not look at financial capability or any other element of responsibility when determining eligibility. . . . Mr. Jenkins further advised that a determination of eligibility is to be made within 5 working days which is not sufficient time for a determination of responsibility to be made. Protest File, Exhibit 26. By letter dated October 5, 1994, the contracting officer advised MTS as follows: Protest File, Exhibit 26 at 12. MTS is the only offeror to which such a letter was sent. Id. By letter dated October 13, 1994, MTS responded to the contracting officer's letter, stating in pertinent part: Protest File, Exhibit 26 at 1. The letter of commitment addressed to the contracting officer and dated October 7, 1994, stated in pertinent part: In the event that MTS is awarded the above contract, will, upon assignment of all claims or monies due or to become due under this contract, advance to MTS working capital not to exceed of all outstanding receivables for use in the performance of said contract. In addition, to ensure that MTS has sufficient funds to transition and start-up the contract, It is understood that the government will rely upon this commitment in making an award of the above contract to MTS. Protest File, Exhibit 26 at 3. The June 30, 1994, statement from MTS' accountants stated that the report was a compilation and that the accountants had not audited or reviewed the accompanying statement. Id. at 6. The contracting officer transmitted MTS' response to the PET, and the team revised its pricing evaluation report to include the information. Transcript at 1039. The Final SEB Report The final scoring and prices after BAFOs were: Tech Tech 5-Year Estimated Price Offeror Score Rank Price Rank A (Caelum) B (MTS) C (Anstec) D (MACA) E (PDS) Protest File, Exhibit 28 at 23. The SEB final report was inaccurate with respect to the number of Transcript at 1284. Id. Id. at 1281-83. The SEB final report contained changes based on the supplemental post-BAFO information submitted by MTS. Protest File, Exhibit 28 at 26. Specifically, the report stated that MTS in its latest audited financial statement reflected a net worth of and that MTS "provided a letter of commitment from a financial institution reflecting working capital of approximately a year." Id.; Transcript at 1268. The SEB final report erroneously characterized MTS' financial statement as "audited," when the statements were compilations. Protest File, Exhibit 28; Transcript at 1044. The final SEB report deleted the which had been in the draft report that Caelum's was the The final SEB report also deleted the significant discriminator Transcript at 696, 1637; Protester's Hearing Exhibit 16; Protest File, Exhibit 28. The contracting officer testified that there were changes to the draft SEB report because the SEB examined the Transportation Acquisition Manual (TAM) and compared what should have been in the SEB report according to the TAM with what they had actually included. Transcript at 1138-39. The SEB concluded that they had put information in certain sections that should not have been there, or should have been in other sections. Id. at 1139. The October 31, 1994, Briefing The SSO received the final SEB report with attachments, and he reviewed that report in preparation for the SEB briefing. Transcript at 649. On October 31, 1994, the SEB attempted to brief the SSO. Id. Before the SSO was able to ask any questions at the briefing, he was called out of the room. Id. at 681. He received a telephone call from either the administrator or the executive director of the FAA. Id. at 681-82. When the SSO returned from taking the telephone call, he asked: "Is there any reason that I should not select MTS?" Id. at 682. No reason was identified. Id. The SSO said he saw no need for the briefing. Id. at 682-83. In his comparison of the proposal prices in the competitive range, the SSO determined that Anstec's price was unrealistic, while MTS' and Caelum's proposals were priced realistically. Transcript at 710, 772, 774, 777-78, 879-80. The SSO did not use the government estimate to evaluate whether the offerors' prices were realistic. Id. at 783. Rather, he performed his own statistical analysis. Id. at 710, 772, 774, 777-80. After reviewing the SEB's final report, the SSO narrowed the candidates for contract award to the three highest-ranked technical proposals -- Caelum, MTS, and Anstec. Id. at 771. The SSO viewed the cost proposals of MTS and Caelum to be essentially identical in terms of the cost data. Transcript at 778-79, 1879. Because of this, the cost evaluations were not a significant factor in his decision to select MTS. Id. The SSO testified that the difference between on one hand and on the other hand, which were more than 10% below the market rate, was not significant in his decision as between Caelum and MTS. Id. at 831-32. Id. at 696. The SSO testified that it did not matter to him that MTS' financials were unaudited, Id. at 782. The SSO compared the Transcript at 726-27, 778. The SSO considered the offered by Caelum to be extremely small because the evaluation and scoring of proposals was Id. at 774-76, 789. The SSO explained why he concluded that the MTS proposal offered the greatest value: The difference in there is a difference. I looked at that in terms of of added value, and I asked myself, given all of the other facts that were in the reports -- the ability to hire people, the ability to transition people over, and knowing full well that either company that I selected would use and get the same people -- I determined it was not in the taxpayer's best interest to spend more. It's as simple as that. Transcript at 885. Intervenor's Expert's Analysis MTS' expert witness testified that for both MTS and Caelum the proposed price is the best estimate of the ultimate cost to the Government, and therefore, MTS' price advantage over Caelum represents a real savings of over the five-year life of the contract. Transcript at 1887-88. The expert further opined that because MTS proposed to pay of the direct compensation paid employees under the incumbent contract, and Caelum proposed to pay of the direct compensation paid under the incumbent contract, both offerors could effectively retain the existing work force at their proposed direct labor rates. Id. at 1891-92. According to MTS' expert, the government cost estimate for the FIPs procurement was of little competitive value because it was based on the labor rates of the sole source incumbent contractor (KenRob) which were higher than those expected in this competitive procurement, and it was easy for the offerors to calculate an approximation of the government cost estimate using information regarding the incumbent contract publicly available under FOIA. Transcript at 1912, 1916-17, 1924. Discussion Is Caelum's Protest Timely? MTS has moved to dismiss Caelum's December 30 protest and portions of its January 6 supplemental protest as untimely.[foot #] 21 In both motions, MTS seeks to dismiss all allegations of violation of the Procurement Integrity Act except for the contention that FAA failed to investigate a possible integrity violation in contravention of FAR 3.104-11 (1989). MTS claims that Caelum knew or should have known the basis for its procurement integrity allegation no later than November 30, 1994, more than four weeks prior to the filing of the December 30 protest. MTS cites the fact that Caelum's ----------- FOOTNOTE BEGINS --------- [foot #] 21 FAA in its posthearing brief also contends Caelum's protest is untimely. ----------- FOOTNOTE ENDS ----------- president was advised in a telephonic conversation by employees of Anstec and MACA that a former FAA employee had participated in the acquisition for FAA and then assisted MTS/OAO in their proposal. MTS further cites the redacted version of the Anstec protest complaint which was provided to Caelum. Caelum responds by stating that it could not know the validity or accuracy of the hearsay in the telephonic conversation or of Anstec's factual allegations. Due to the potentially serious nature of those allegations, it deferred filing a protest rather than rely on inconclusive, hearsay information. Caelum filed its protest within ten working days of its review of the protest file, when it first independently learned of a factual basis for these allegations. We agree with Caelum that its allegations are timely. Our rules do not require that a vendor file a protest alleging a procurement integrity allegation simply because its competitor did. While we have held that vendors will be charged with knowledge of facts which they should have known, it would not be appropriate for us to charge vendors with a sufficient basis for filing a protest based only upon rumor. As we recognized in United Telephone Co. of the Northwest, GSBCA 10031-P, 89-3 BCA 21,944, at 110,367, 1989 BPD 151, at 3, such rumor and innuendo "would be a flimsy reed indeed on which to base a lawsuit."[foot #] 22 Counsel has an obligation to ensure that allegations of a serious nature such as alleged procurement integrity violations -- which carry criminal penalties in other fora and could adversely affect an individual's reputation -- are based on fact rather than suspicion, innuendo, or hearsay. We would be sending the wrong message if we were to require protesters to parrot allegations raised by other parties without knowing the facts.[foot #] 23 ----------- FOOTNOTE BEGINS --------- [foot #] 22 Although the Board's merits decision in United Telephone was vacated for lack of jurisdiction, US West ________________ ________ Communications v. United States, 940 F.2d 622 (Fed. Cir. 1991), _______________________________ we deem the rationale on this point in the above-cited decision to be persuasive. [foot #] 23 The same analysis applies to MTS' contention that Caelum's organizational conflict of interest allegation is untimely. MTS contends that this "new" protest ground is based upon the same factual allegations that formed the basis for the alleged violation of the Procurement Integrity Act. For the same reason that we have found the Procurement Integrity Act allegations to have been timely filed within ten working days following counsel's review of the protest file, this allegation is also timely. ----------- FOOTNOTE ENDS ----------- There is another ground here for concluding that this allegation is timely. As we ruled in our decision dismissing Anstec's protest with prejudice, Caelum's and PDS' timely interventions survived as viable protests. Anstec, Inc. v. Department of Transportation, GSBCA 13087-P, et al. 1995 BPD 15 (Jan. 13, 1995). The grounds in Anstec's protest applicable to Caelum may be pursued by Caelum in this protest. Atlis Federal Services, Inc. v. Department of Health and Human Services, GSBCA 12959-P, 1994 BPD 235 (Nov. 15, 1994). While MTS also sought to dismiss Anstec's protest (and hence the surviving Caelum/PDS protests) as untimely, that motion fails. MTS claimed Anstec should have filed its protest within ten working days of learning of Mr. Garner's activities -- before any award was made. While Anstec could have raised such an allegation pre-award, it was not required to do so. Anstec did not know the alleged Procurement Integrity Act violation would have any impact on this procurement until award was made to MTS/OAO. Further, allowing offerors to wait until after award to raise this type of a Procurement Integrity Act allegation would have the salutary effect of permitting the agency to conduct an investigation pursuant to FAR 3.104-11. Thus, since Anstec's protest timely raised a Procurement Integrity Act allegation, Caelum may pursue that allegation because Caelum's intervention in Anstec's protest survived as an independent protest when Anstec withdrew its protest. MTS also alleges that Caelum's challenge to the best value determination is untimely because it did not file its own protest until December 30, though it received a debriefing on November 28. Based upon our analysis in Atlis, Anstec's allegation of an improper best value determination survived when Caelum and PDS pursued their interventions and their interventions were deemed protests. Thus, because Caelum's intervention was filed within ten working days of award and it intervened in all grounds of protest raised by Anstec pertinent to it, and the best value allegation was timely raised by Anstec, Caelum may pursue the best value allegation. MTS also contends that Caelum's allegation regarding a lack of meaningful discussions is untimely. MTS contends that when Caelum learned at the debriefing that its cost/price proposal was only slightly higher than MTS' and that Caelum had no deficiencies or weaknesses, Caelum had sufficient information to allege a lack of meaningful discussions. We do not agree. This limited information does not put an offeror on notice that discussions were improper. Caelum's allegation regarding a lack of meaningful discussions is based upon specific information subsequently disclosed in the protest file, i.e., that the agency did not conduct discussions with any offeror who was rated "2" or above. There is no suggestion that this information was disclosed during the debriefing or at any time prior to counsel's review of the protest file. Thus, this ground of protest is timely. Did Protester Establish a Violation of the Procurement Integrity Act? Protester has raised a serious allegation of a violation of the Procurement Integrity Act and its implementing regulations by FAA, Mr. Garner, and MTS/OAO. Protester's Posthearing Brief at 22-32. In addressing this allegation, we recognize that the agency orally concluded in March 1994 that there was no procurement integrity violation which impacted an award to MTS/OAO. Because this agency determination was based upon incomplete factual information, rather than an investigation as required by FAR 3.104-11, we afford it no weight. Caelum argues that Mr. Garner was a procurement official on this procurement, that he acquired procurement-sensitive information, that there was a serious appearance of impropriety when he went to work for OAO and assisted in MTS/OAO's proposal efforts, and that Mr. Garner's conduct resulted in MTS/OAO receiving an unfair competitive advantage in this procurement.[foot #] 24 From this Caelum contends that the award to MTS should be canceled, and that MTS/OAO should be disqualified from any further competition on the FIPs procurement. The Act prohibits a contractor, during the conduct of procurement, from knowingly soliciting or obtaining directly or indirectly from an agency employee any proprietary or source selection information regarding such procurement prior to the award of a contract. 41 U.S.C. 423(a) (1988). The Act prohibits a procurement official from knowingly soliciting or accepting any promise of future employment or business opportunity, seeking or receiving a gratuity or thing of value from any competing contractor, or disclosing any proprietary or source selection information to any person other than one authorized to receive such information. 41 U.S.C. 423(b) (1988). Section (f) of the Act, Restrictions Resulting from Procurement Activities of Procurement Officials, prohibits an individual who was a procurement official from knowingly participating in any manner as a representative of a competing contractor in any negotiations leading to award or participating personally and substantially on behalf of the competing contractor in the performance of the contract. The Act contains criminal and civil penalties for violation. ----------- FOOTNOTE BEGINS --------- [foot #] 24 Caelum does not cite any evidence that Mr. Garner actually disclosed procurement-sensitive information ___________________ to MTS/OAO. Rather, protester argues that the purpose of the Act is to avoid after-the-fact determinations of how much procurement-sensitive information was known to an individual and "could have been conveyed to a competing contractor." _____________________________ Protester's Posthearing Brief at 32 (emphasis added). ----------- FOOTNOTE ENDS ----------- The implementing regulations in the FAR set forth the statutory prohibitions and restrictions of the Procurement Integrity Act in Part 3.104-3. In addition, FAR 3.104-8(a) expressly states that for a violation of the Procurement Integrity Act to occur the conduct must be engaged in knowingly: (a) Knowing violations. Neither a procurement official nor a competing contractor violates the restrictions set forth in 3.104-3 unless the prohibited conduct is engaged in knowingly. Thus, in order to establish a violation of the Procurement Integrity Act and its implementing regulations, protester has the burden of demonstrating both that Mr. Garner was a procurement official and that he knowingly violated the proscriptions of the Act and regulations. Protester has met neither burden here. Mr. Garner was not a Procurement Official Both the Act, 41 U.S.C. 423(p), and the implementing regulations, FAR 3.104-4(g), define the term "procurement official" to mean an agency employee who participated personally and substantially in any of the following activities for a particular procurement: (i) Drafting a specification or a statement of work for that procurement; (ii) Review and approval of a specification or statement of work developed for that procurement; (iii) Preparation or development of procurement or purchase requests for that procurement; (iv) The preparation or issuance of a solicitation for that procurement; (v) Evaluation of bids or proposals for that procurement; (vi) Selection of sources for that procurement; (vii) Negotiations to establish the price or terms and conditions of a particular contract or contract modification; or (viii) Review and approval of the award of a contract or contract modification. The touchstone for ascertaining whether an individual was a procurement official is whether or not he or she participated personally and substantially in such activities. FAR 3.104-4(g) defines personally and substantially as follows: "Participated personally and substantially" means active and significant involvement of the individual in activities directly related to the procurement. To participate "personally" means directly, and includes the participation of a subordinate when actually directed by the supervisor in the matter. To participate "substantially" means that the employee's involvement must be of significance to the matter. For example, the review of procurement documents solely to determine compliance with applicable regulatory, administrative, or budgetary requirements or procedures does not constitute substantial participation in a procurement. It requires more than official responsibility, knowledge, perfunctory involvement, or involvement on an administrative or peripheral issue. A finding of substantiality should be based not only on the effort devoted to a matter, but on the importance of the effort. While a series of peripheral involvements may be insubstantial, the single act of approving or participating in a critical step may be substantial. Protester cites the following facts in support of its contention that Mr. Garner was a procurement official in the FIPs recompetition: . As head of the planning and support division, Mr. Garner had direct responsibility for the efforts of AMI-110 and AMI-120. . Mr. Garner directly supervised Ms. Cooley who was gathering the necessary information for the FIPs reprocurement beginning in December 1991 including the government cost estimate, statement of work, and skill mixes. . Ms. Cooley had responsibility for planning the FIPs reprocurement, and had access to proprietary and procurement sensitive information. . Mr. Garner initialed the procurement request which contained the government's cost estimate, and was aware of the government's cost estimate. . Mr. Garner's initials represented his review and approval of the procurement request. . In 1992, the FIPs support services procurement was the largest single procurement at the Center. . If Mr. Garner or some other individual from AMI-100 had not initialed the procurement request, it would not have gone forward. Protester's Posthearing Brief at 24-27. Protester cites two additional indicia of Mr. Garner's status as a procurement official which the Board totally discounts -- the attestation of procurement integrity and the two written FAA legal opinions. The testimony uniformly indicated that the attestation's listing of Mr. Garner as a procurement official was simply wrong, and that he never executed a FIPs- specific procurement integrity certification. Protester cites the FAA's October 1993 legal opinions stating that Mr. Garner was a procurement official. The October opinions were based upon incomplete information and in part upon the erroneous attestation and were subsequently disavowed by the counsel who prepared them. There is a dearth of precedent addressing the issue of who is a procurement official within the meaning of the Procurement Integrity Act. In Textron Marine, B-255580.3, 94-2 CPD 63, at 18 (Aug. 2, 1994), the Comptroller General construed the Procurement Integrity Act to conclude that a former government employee was not a procurement official. In Textron Marine, the awardee's employee had worked formerly as an alternate contracting officer's technical representative (COTR) on an incumbent contract and for the subject procurement. The employee had reviewed technical instructions (essentially task order proposals) of the incumbent contractor which included pricing and weights for each category of costs. This individual had participated in drafting the statement of work, providing input as to the Government's requirements and editorial suggestions. Subsequently, he recused himself. Following his recusal, the SOW was revised, and the information in the document became available to all offerors. GAO concluded that this individual was not a procurement official because his participation in the drafting of the statement of work was not substantial. See also RAMCOR Services Group, Inc., B-253714, 93-2 CPD 213 (Oct. 7, 1993) (Government employee who was program manager at Federal Law Enforcement Training Center (FLETC) was not a procurement official since he had no involvement with drafting, reviewing, or approving the RFP or specifications, evaluating proposals, selecting sources, conducting negotiations, or reviewing or approving award). Applying the regulatory definition and precedent to the instant case, we conclude that Mr. Garner was not a "procurement official" within the meaning of the Procurement Integrity Act. Mr. Garner participated personally but not substantially in the FIPs recompetition. While Mr. Garner had official responsibility, as the supervisor for Ms. Cooley, for putting together the FIPs recompetition effort, Ms. Cooley, to quote her own words, "took the ball and ran with it" and did not involve Mr. Garner. The latter was at the time "focused on retirement" and working on a major reorganization within the agency. Leo Epperson, the director of AMI-1, also retained considerable supervisory direction over Ms. Cooley, independent of Mr. Garner, on this effort. All of Mr. Garner's alleged involvement in the FIPs recompetition occurred well before the issuance of the solicitation. He did not participate in drafting the statement of work or in preparing the government estimate. According to his testimony, he may not even have reviewed them, but simply signed off on the procurement request so the recompetition could go forward. Mr. Garner had no participation whatsoever in drafting of the source selection plan or evaluating proposals. He was not a member of the SEB, he never saw any competing proposals, and he was not involved at all once he recused himself on March 1, 1993 -- almost a month before the solicitation was initially issued and six months before the solicitation was reissued. In comparing the detailed analysis performed by the Comptroller General in the Textron Marine decision with the facts of this case, we note that the former government employee in Textron Marine had more recent exposure to a competitor's sensitive information while in Government and more substantial participation in that he actually participated in drafting and revising the SOW.[foot #] 25 Nor has protester demonstrated that Mr. Garner knowingly attempted to secure employment improperly or transmit proprietary information to OAO. As explained in FAR 3.104-8, if a procurement official satisfies his duty to inquire and acts in good-faith reliance on an agency ethics opinion, he does not knowingly engage in prohibited conduct. Here, Mr. Garner consulted with FAA counsel before he initiated any employment interviews. Upon the advice of that counsel, he immediately recused himself from any activities in the FIPs recompetition. Subsequently, when he believed that he might be hired as OAO's proposal manager, he wrote another letter requesting an agency opinion on his potential employment. Although in the course of that letter, Mr. Garner did not disclose facts which at that time he did not remember or never knew, i.e., his initialing the procurement request and being listed on the attestation, Mr. Garner nonetheless made a good faith effort to disclose his potential employment and obtain the agency's approval. Once the agency declined to give that approval, Mr. Garner left the employment of OAO. The sum of Mr. Garner's activities thus indicates that he had no intention to violate the Act. ----------- FOOTNOTE BEGINS --------- [foot #] 25 We recognize that the Comptroller General in Textron Marine was reviewing an agency's conclusion that no _______________ procurement integrity violation existed and no unfair competitive advantage was afforded to the awardee -- decisions to which the Comptroller General affords deference. ----------- FOOTNOTE ENDS ----------- Caelum further claims as part of the alleged procurement integrity violation that Mr. Garner's activities establish a serious appearance of impropriety which necessarily taints the award to MTS. Caelum argues that Mr. Garner must be presumed to have obtained and retained source selection information pertinent to KenRob, the government estimate, and the performance work statement which translate into his communicating such information to MTS/OAO during his employment at OAO. However, there is no evidence to support such a conclusion. There is no evidence of record that Mr. Garner remembered the PWS or the government estimate or any KenRob proprietary information or that he transmitted it to any member of the OAO/MTS team. All evidence is to the contrary. Mr. Garner initialed the procurement request in July 1992, and did not recall doing so. At that point in time, the solicitation had not yet been issued. He was not employed at OAO until August 1993, and did not participate in the red team until October 1993. Both the government estimate and the performance work statement could have changed in the year between these events. In short, even if Mr. Garner had remembered the information, it could have been inaccurate and unreliable. Cf. FHC Options, Inc., B-2467933, 92-1 CPD 366, at 6 (Apr. 14, 1992) ("any inside information the former government employee retained about source selection plan as it existed when he was involved would have been obsolete, or at least unreliable, by the time the RFP was issued"). Nor did Mr. Garner have access to such significant amounts of procurement sensitive information relating to this procurement that it would have been impossible for him to avoid using the restricted information. Thus, we deem this case distinguishable from Holmes and Narver Services, Inc./Morrison-Knudson Services, Inc., a joint venture; Pam Am World Services, Inc., B-235906, B-235906.2, 89-2 CPD 379 (Oct. 26, 1989), aff'd on reconsideration, 90-1 CPD 299 (Mar. 16, 1990). There, a former commander of the Redstone Arsenal Support Activity (RASA) who had been a member of the Source Selection Advisory Council and had reviewed a significant amount of procurement sensitive information, retired, went to work for a vendor and drafted several sections of that offeror's proposal. That proposal was rated technically superior to all other proposals. GAO concluded that because the proposal was drafted in significant part by the former government official, it was unlikely that the individual could have avoided using the restricted information to which he had access in drafting the proposal. There, despite the absence of specific evidence of bad faith, GAO concluded that it was likely that this competing offeror had obtained an unfair competitive advantage.[foot #] 26 ----------- FOOTNOTE BEGINS --------- [foot #] 26 In remedying that violation, GAO ordered release to the other offerors of all similar procurement sensitive information to which the official had access. This included the acquisition plan, the independent government (continued...) ----------- FOOTNOTE ENDS ----------- Here, we do not agree that the limited procurement sensitive information protester has identified, i.e., the independent government estimate and the draft performance work statement appended to the procurement request, and Mr. Garner's limited review of task proposals under the incumbent contract, would have conferred a competitive advantage on MTS/OAO. In contrast, the facts of this case more closely parallel cases in which there was no improper competitive advantage by virtue of a firm's employment of a former government employee. See, e.g., Stanford Telecommunications, Inc., B-258622, 1995 WL 49397 (Feb. 7, 1995) (former government project manager who had access to information concerning protester's successful proposal for a recent contract subsequently worked as a proposal consultant and program manager for a competitor. Since no evidence refuted former government employee's affidavit that he did not take any cost and pricing data or procurement sensitive information with him and had no recollection of any contract information from protester, there was no basis to conclude that his employer had access to sensitive cost information when preparing its proposal.); ITT Federal Services Corp., B-253740.2, 94-2 CPD 30, at 7 (May 27, 1994) (former government employee who participated in drafting PWS did not confer unfair competitive advantage where PWS was substantially changed afterwards and released in the solicitation); General Electric Government Services, Inc., B-245797.3, 92-2 CPD 196, at 11-12 (Sept. 23, 1992) (employment of former COTR and ACO on incumbent contract did not confer unfair competitive advantage where they could not remember or reconstruct data in their possession); cf. TRW, Inc., GSBCA 11309-P, 92-1 BCA 24,389, at 121,789, 1991 BPD 205, at 12 (although improper social contact between an SEB member and a contractor created an appearance of impropriety, Board found no evidence of actual prejudice to any offeror or adverse effect on the evaluation or selection decision and denied the protest). Based upon these facts, we find no violation of the FAR prohibition against organizational conflicts of interest. FAR 9.501. Protester argues that this regulation prohibits Mr. Garner from working on the same procurement for the ----------- FOOTNOTE BEGINS --------- [foot #] 26 (...continued) estimate, and the source selection plan. See also Litton _________ ______ Systems, Inc., B-234060, 89-1 CPD 450 (May 12, 1989) (Awardee's _____________ contract terminated where awardee actually received source selection sensitive information improperly regarding its only competitor); Naddaf International Trading Co., B-238768.2, 90-2 _________________________________ CPD 316 (Oct. 19, 1990) (agency's decision to disqualify awardee from procurement upheld where former government official who had participated in procurement before retirement, went to work for a vendor, and made telephone calls to four government employees while the award decision was pending concerning his employer's eligibility for award; GAO noted: "There is no reasonable explanation in the record for these discussions other than to affect the award decision."). ----------- FOOTNOTE ENDS ----------- Government by supervising development of the requirements and for the awardee by participating in OAO's proposal efforts. Contrary to protester's argument, the services being procured here were not developed under Mr. Garner's supervision and control. Did FAA Perform a Proper Investigation of the Possible Violations of the Procurement Integrity Act Pursuant to FAR 3.104-11? Protester argues that the evidence proves that the Government failed to conduct a proper investigation of any possible violation of the Procurement Integrity Act as mandated by FAR 3.104-11. Protester's Posthearing Brief at 49. FAR 3.104-11 provides in pertinent part: (a) If the contracting officer makes or receives a disclosure of information pursuant to subsection 27(e) of the Act or otherwise receives or obtains information of a violation or possible violation of subsections 27(a), (b), (d), or (f) of the Act (see 3.104-3), the contracting officer shall determine whether the reported violation or possible violation has any impact on the pending award or selection of the source therefor. (1) If the contracting officer concludes that there is no impact on the procurement, the contracting officer shall forward the information concerning the violation or possible violation, accompanied by appropriate documentation supporting that conclusion, to an individual designated in accordance with agency procedures. With the concurrence of that individual, the contracting officer shall, without further approval, proceed with the procurement. The individual concurring with that conclusion shall forward all information relating to the violation or possible violation to the HCA, or his or her designee, to satisfy the disclosure requirements of subsection 27(e)(2) of the Act. (2) If the individual reviewing the contracting officer's conclusion does not agree with that conclusion, he or she shall advise the contracting officer to withhold award and shall promptly forward the information and documentation to the HCA or his or her designee. (3) If the contracting officer determines that the violation or possible violation impacts the procurement, the contracting officer shall promptly forward the information to the HCA or his or her designee. (b) The HCA or his or her designee receiving any information describing an actual or possible violation of subsections 27(a), (b), (d), or (f) of the Act, shall review all information available and take appropriate action in accordance with agency procedures, such as-- (1) Advising the contracting officer to continue with the procurement; (2) Causing an investigation to be conducted; (3) Referring the information disclosed to appropriate criminal investigative agencies; or (4) Determining that a violation occurred. The regulation further provides that if the HCA determines there has been a violation, then the HCA may direct the contracting officer to cancel the procurement, disqualify an offeror, take any other appropriate actions in the interests of the Government, and void or rescind any awarded contract. We agree with Caelum that the agency did not follow this regulation. Although the contracting officer acted with the best of intentions -- raising the issue with her superior and counsel -- she never independently determined whether the possible violation had any impact on the pending award or selection. Rather, at the time of award she concluded that there was no violation, relying upon oral advice of counsel. Yet counsel do not have the responsibility for implementing FAR 3.104-11 or investigating procurement integrity violations. Moreover, counsel's advice was based only upon a partial generic factual scenario relayed to three other attorneys -- one of whom did not have time to consider it. The contracting officer was obligated to forward the information with appropriate supporting documentation to "an individual designated in accordance with agency procedures." FAR 3.104-11(a)(1), (2). That was never done. The agency designee could then have concurred with the contracting officer or not. Id. That was never done. The agency designee was then required to forward all information to the HCA to satisfy the disclosure requirements of the Act. Id. That was never done. The agency here failed to investigate properly a serious procurement integrity allegation in the context of a $50,000,000 procurement -- never putting the generic scenario transmitted to the experts in writing, leaving out the details of Mr. Garner's prior employment, never talking to Mr. Garner, never obtaining a clear opinion from the expert on ethics in Washington, DC[foot #] 27 -- and all of this after counsel had concluded in writing on two prior occasions that there was a violation. Nor do we accept the post hoc explanation offered by government witnesses at the hearing that Mr. Garner's activities did not rise to the level of a "possible violation" but rather were merely a "concern." After characterizing Mr. Garner's activities as a possible procurement integrity violation in writing throughout the course of this procurement, government witnesses recharacterized it as merely a concern, contradicting documentary evidence and depositional testimony. We find the recharacterization to lack credibility. FAR 3.104-4(1) defines "possible violation" as "specifically identified or documented circumstances that provide a reasonable basis to believe that a violation of the Act may have occurred. Rumor and hearsay are not, by themselves, a reasonable basis to conclude that a possible violation exists." The facts in this case are not rumor and hearsay. Mr. Garner initialed the procurement request, he may have reviewed it, and he saw the government estimate, KenRob's source selection sensitive information, and the draft PWS. Additionally, he was a manager in the IRM arm of the Center which was responsible for initiating the FIPs recompetition, he recused himself from that effort, and he had responsibility up until the time of his recusal for that effort as the supervisor of Cheryl Cooley. He was initially hired by OAO as "a proposal facilitator" for the FIPs competition just prior to the time the solicitation was reissued. The contracting officer on two separate occasions sought advice from FAA counsel as to whether there was a "possible procurement integrity violation," and this is reflected in minutes of the SEB. MTS argues that finding a violation of this regulation does not require that the protest be sustained since any investigation that the agency should have conducted has already been accomplished through the protest process. The Board agrees with MTS that no useful purpose would be served by remanding the matter to the agency for an investigation when the facts have been sufficiently aired in this proceeding. Although this violation prejudiced the procurement process by perpetuating misunderstandings which could have been put to rest long ago, had the agency done a proper investigation, given the fully developed record here we conclude that it did not prejudice Caelum. The agency's violation of this procedural regulation did not ----------- FOOTNOTE BEGINS --------- [foot #] 27 The draft memorandum purporting to contain the FAA's chief ethics officer's opinion was completely at odds with the law. That draft memorandum concluded that a former government employee who was procurement official could work on a competitor's proposal with impunity. ----------- FOOTNOTE ENDS ----------- adversely impact the selection decision or affect Caelum's opportunity to compete. We deny this ground of protest. Did FAA Fail to Conduct Meaningful Discussions with Caelum and Fail to Afford Caelum an Opportunity to Submit a BAFO? Caelum contends that FAA's decision not to hold technical discussions with any offeror in a technical subfactor for which the offeror was rated a "2" (satisfactory) or higher improperly denied offerors an opportunity to improve their proposals at BAFOs and to provide the best value to the Government. FAA and MTS counter by arguing that the contracting officer correctly limited technical discussions to those areas of proposals that had scored less than "2" because those areas were not "deficiencies." Intervenor MTS' Posthearing Brief at 101; FAA's Reply Brief at 12. Further, MTS contends that Caelum has not demonstrated any prejudice by virtue of the FAA's failure to conduct discussions. We deny these grounds of protest. Even assuming arguendo that meaningful discussions were not held with Caelum in this procurement, Caelum has failed to demonstrate prejudice. Caelum has not identified any area of its proposal which it claims warranted discussions. Nor has Caelum demonstrated that it could have improved its proposal in any material way so as to raise its score or increase its advantage over MTS. Nor did the extensive record of these proceedings contain any suggestion of an area of Caelum's proposal which should have been discussed.[foot #] 28 Thus, were we to grant the relief Caelum requests -- a reopening of discussions -- we would be hard pressed to identify an area to be discussed. We are troubled by the FAA's conduct of negotiations here -- automatically applying the long-standing Center policy dictating that discussions could be held only as to subfactors ranked less than "2," rather than exercising judgment and deciding whether discussions were warranted based upon this specific acquisition and the individual proposals.[foot #] 29 We note, ----------- FOOTNOTE BEGINS --------- [foot #] 28 Cf. Sperry Corp., 65 Comp. Gen. 195 (1986), ___ ____________ 86-1 CPD 28 (agency should have conducted discussions where two acceptable technical proposals contained, in GAO's view, informational deficiencies or omissions). [foot #] 29 FAR 15.610(b) mandates that the content and extent of discussions is a matter of the contracting officer's judgment, based on the particular facts of each acquisition. Here, because these FAA officials adhered to an artificial standard wholly unrelated to the particular acquisition, but applied by the Center and the contracting officer in every negotiated procurement "bar none," they failed to analyze the (continued...) ----------- FOOTNOTE ENDS ----------- further, that the application of such a policy could unfairly prejudice offerors and result in unequal treatment. However, that did not occur here. The only competitor in the running with Caelum, MTS, also was not the beneficiary of discussions and was similarly afforded no opportunity to change any aspect of its technical proposal at BAFO. In sum, because Caelum failed to identify any area of its proposal which could have been improved by discussions, we hold that protester suffered no prejudice by virtue of the agency's failure to conduct technical discussions with it. Did the Government Perform an Improper Cost Evaluation? Protester further argues that FAA failed to evaluate costs for "completeness, reasonableness, and realism." Protester's Posthearing Brief at 72-76. Protester argues that because the agency did not conduct a "most probable cost" analysis, did no cost realism comparison, did not document any cost realism analysis, and did not adjust any offeror's proposed cost, the agency violated the terms of the RFP. In essence, Caelum claims that the Government treated this procurement for estimated multi- year requirements as a firm fixed-price contract for firm government requirements. FAA and MTS contend that the cost evaluation was adequate in that the PET reviewed MTS' Posthearing Brief at 50-51, 105; FAA's Reply Brief at 13. MTS contends that given the fixed-price nature of the contract, this cost analysis was more than sufficient. Id. at 105. Further, MTS points out that its expert testified that the cost analysis was appropriate in that for both MTS and Caelum the proposed price was the best estimate of the ultimate cost to the Government. Id. While the Government's cost evaluation could have been more accurate and better documented, we conclude that despite these problems, protester did not demonstrate that the cost realism conclusion was erroneous or illegal. Thus, we deny this ground of protest. Did FAA Conduct Improper Post-BAFO Discussions with MTS? ----------- FOOTNOTE BEGINS --------- [foot #] 29 (...continued) proposals to consider whether there were uncertainties or deficiencies which should have been discussed. ----------- FOOTNOTE ENDS ----------- Caelum contends that FAA violated FAR 15.611(c) by conducting post-BAFO discussions with MTS and permitting it to modify its proposal. Protester's Posthearing Brief at 76-78. It is uncontroverted that, after BAFOs, FAA asked MTS for additional information Caelum contends that this type of information had a significant impact on the Government's evaluation of the technical factor of risk which amounted to of the overall technical score. Further, Caelum points out that the late submission by MTS of this information caused a change in the SEB's final report presented to the SSO. FAA and MTS contend that the post-BAFO communication was related to MTS' responsibility and does not fall within the definition of discussions in FAR 15.601.[foot #] 30 Further, MTS argues that neither the technical nor the cost evaluation of MTS was affected by the post-BAFO information. MTS' Posthearing Brief at 107-11. Finally, MTS argues that any minor impact this information may have had on the evaluation of MTS' cost proposal was de minimis and nonprejudicial. We agree that the agency violated FAR 15.611(c) by seeking and receiving information from MTS post-BAFO, but conclude that this violation did not prejudice Caelum. Thus, we deny this ground of protest. "In negotiated procurements such as this . . ., the line between responsibility factors and proposal evaluation factors is not a sharp one." Delta Data Systems Corp. v. Webster, 744 F.2d 197, 200 (D.C. Cir. 1984). So too, the information submitted by MTS post-BAFO can be properly characterized as "double edged," affecting the cost evaluation for completeness, the technical factor of risk, and a legitimate responsibility determination. See Technology, Management & Analysis Corp. v. Environmental Protection Agency, GSBCA 12082-P, 93-2 BCA 25,711, 1992 BPD 406. ----------- FOOTNOTE BEGINS --------- [foot #] 30 FAR 15.601 defines discussions as: Any oral or written communication between the Government and an offeror (other than a communication conducted for the purpose of minor clarification), whether or not initiated by the Government, that (a) involves information essential for determining the acceptability of a proposal, or (b) provides the offeror an opportunity to revise or modify its proposal. ----------- FOOTNOTE ENDS ----------- We believe that MTS' post-BAFO information addressed evaluation factors. The RFP expressly required that offerors submit financial statements, audited if available, including balance sheets and income statements, as part of their price/cost proposals. In its BAFO, Caelum submitted a letter from a bank committing to provide in working capital. Further, the RFP mandated that cost and price would be evaluated on the basis of completeness as well as reasonableness and realism. Completeness was defined to mean that offerors were to provide "sufficient data to allow complete analysis and evaluation of proposed costs . . . ." The technical evaluation factor of risk to the Government expressly stated that the Government would evaluate each technical proposal based upon perceived risks including "the presence of a sound plan to ensure continuity of operations and quality performance." Protest File, Exhibit 6 at 67. Further, FAA solicited this type of information from offerors during initial discussions. MTS was then advised "that its financial statements submitted were not certified." Protest File, Exhibit 21 at 27. MTS was also advised during discussions that OAO had submitted financial statements for the wrong years, further suggesting that FAA itself considered the type of information that it solicited from MTS post-BAFO to have been the proper subject of initial discussions to enable offerors to revise their price proposals. Given these circumstances, the agency violated FAR 15.611(c) by conducting post-BAFO discussions and permitting MTS to submit information which modified its cost proposal and related to technical risk. However, Caelum has not demonstrated prejudice as a result of this violation. Neither the TET nor the PET used the information in their respective evaluations of MTS' proposal, and MTS' technical score and cost remained unchanged after receipt of the post-BAFO information. Although the post-BAFO information was reflected in the SEB's final report, Caelum has not demonstrated that the inclusion of the post-BAFO information impacted the selection. To the contrary, the testimony of the SSO indicates that it did not. The SSO stated that he considered MTS and Caelum essentially equivalent in terms of their respective cost proposals. Moreover, Caelum did not suggest that it could have submitted enhanced information post-BAFO on its financial capability. Thus, while the FAA violated the proscription against conducting post-BAFO discussions, Caelum has failed to show any prejudice by virtue of that violation. As our appellate authority recognized in Grumman Data Systems Corp. v. Widnall, 15 F.3d 1044, 1048 (Fed. Cir. 1994), "[O]verturning awards on de minimis errors wastes resources and time, and is needlessly disruptive of procurement activities and governmental programs and operations. Andersen Consulting Co., 959 F.2d at 932[.]" See also Fortran Corp. v. Department of Transportation, GSBCA 12952-P, 1994 BPD 245, at 7 (Oct. 27, 1994), reconsideration denied, 1994 BPD 281 (Dec. 6, 1994). Did FAA Conduct an Inadequate and Unreasonable Best Value Analysis? Caelum contends that in procurements where technical merit is more important than cost in an evaluation scheme, the Government may not choose a lower rated, lower cost proposal without a specific finding that the technically superior proposal is not worth the cost premium. Protester's Posthearing Brief at 60. Here, because of the closeness of technical scores and because the SSO believed that either company would use the same incumbent personnel for performance, the SSO deemed the two proposals to be technically equivalent and cost became the "driving factor." He then determined that it was "not in the taxpayers' interest to spend more." Transcript at 885. Protester has not demonstrated that this determination was erroneous or violated statute or regulation. As we recognized in CRC Systems, Inc., GSBCA 9720-P, 89-1 BCA 21,411, at 107,918, 1988 BPD 302, at 18, reconsideration denied, GSBCA 9720-P-R, 1989 BPD 19 (Jan. 9, 1989) "Having reasonably concluded the proposals were technically equal from this standpoint, the contracting officer was permitted under the solicitation to regard price or cost as the determinative factor. Indeed, the Board has held that even under an evaluation scheme where technical factors are given more weight than cost the Government is still not expected to ignore cost." (Citations omitted.) Caelum also argues that the SEB's final report to the SSO was inaccurate and incomplete and deleted significant information to its prejudice. Caelum requests that the FAA be required to conduct a proper best value analysis. Although the SEB report did contain some errors and was incomplete, the SSO, when presented with full and accurate information during the protest hearing, credibly testified that even correcting the inaccuracies in the report, he remained convinced that MTS' proposal constituted the best value to the Government. Based upon our de novo review of this matter, we find no basis to overturn the best value determination as explained by the SSO and supported by the full record. Decision The protest is DENIED. _____________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ____________________________ ____________________________ CATHERINE B. HYATT MARTHA H. DeGRAFF Board Judge Board Judge