Last week, I blogged about the Court of Federal Claims (“CoFC”) decision that upheld a Department of Veterans Affairs contracting officer’s (“CO”) determination that organizational conflict of interest (“OCI”) rendered Monterey Consultants, Inc.(“Monterey”) ineligible for an award. No. 14-1164c (March 26, 2015). As noted in the original blog, this decision is important for two reasons: 1) it relates to a contract involving the screening of applications to the Veterans First Contracting Program (i.e., the Center for Verification and Evaluation’s VetBiz registry); and 2) the lessons presented regarding guarding against OCI.
The day after posting my blog, I received an email from Mr. Mike Knipper, the President of Ohio-based Monterey. Mr. Knipper took no issue with the original blog, but he had some facts and thoughts to share. His side of the story presents a valuable lesson: you can never go too far with OCI, which may result when “factors create an actual or potential conflict of interest on an instant contract.” FAR 9.502(c).
According to Mr. Knipper, if a CO deems you ineligible for an award because of OCI, because of the extremely wide latitude given to COs, you’re most likely dead in the water. “Arbitrary and capricious” is the standard you must meet if challenging his decision, and that’s an almost impossible feat.
As Mr. Knipper relayed, contrary to the verbiage of the CoFC decision, Monterey did in fact have a mitigation plan in place. While Monterey’s employees and its subcontractor’s employees technically had access to OSBDU/CVE information, each employee had completed OCI training and signed Non-Disclosure Agreements that prohibited them from releasing information which could be used for an unfair advantage in future acquisitions. Even though Mr. Knipper says he had no knowledge of what these D.C.-based individuals might have learned because of these firewalls installed, the CO still determined there was a potential for OCI. This was despite not conducting on-site interviews to collect facts or information about whether OCI existed; in fact, the CO’s investigation consisted of a mere two phone calls to government personnel.
“This is a shame,” commented Mr. Knipper. “We came onto the CVE contract in late 2013, and we hit the ground running to improve the Program. I would have liked to have continued that work.”
As someone who deals with the CVE on a regular basis, I can attest that the verification process has in fact improved greatly over the last year. (Don’t get me wrong – I still get document requests that are head-slappers; but a lot of times that’s an issue with an individual examiner and not the program as a whole). While I believe much of the improvement is attributed to Jeffrey Gault, the new Acting Director who has been proactive about effecting change, I know that Monterey was on board during these improvements. Now the new contractor must start from scratch – learning the ropes, training its examiners, assimilating into the process.
Don’t let your business fall victim to OCI issues. If you think you might have an issue with OCI, do everything necessary to mitigate and/or eliminate it. Mr. Knipper certainly has learned that lesson. “In the future, we’re going to have firewalls that may seem way too extreme. But that’s what you have to do,” he said.
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