Potential Procurement Integrity Act Violation

DSFG argues that a violation of the Procurement Integrity Act occurred in connection with the release of its proposals, and that the agency has not adequately considered the impact of that release in deciding to move ahead with the PIVOT I solicitation. As noted, the agency prepared the PID, AR, exh. M, and determined that the release of the DSFG proposals did not have an adverse impact on the PIVOT I procurement, and also more generally, that the release did not have an adverse impact on the other PIVOT procurements contemplated by the agency. DSFG maintains that the agency failed to take into consideration several important factors in reaching its conclusion.

We sustain this aspect of DSFG’s protest. The procurement integrity provisions of the Office of Federal Procurement Policy Act, as amended, 41 U.S.C. §§ 2101-2107, known as the Procurement Integrity Act, provide, among other things, that “[e]xcept as provided by law, a person shall not knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” 41 U.S.C. § 2102(b). The Federal Acquisition Regulation (FAR) states that a contracting officer who receives or obtains information of a violation or possible violation of the Procurement Integrity Act must determine if the reported violation or possible violation has any impact on the pending award or selection of the contractor. FAR § 3.104-7(a). If the contracting officer determines that there is no impact on the procurement, he or she must forward the information concerning the violation or possible violation, along with documentation supporting the determination that there is no impact on the procurement, to an individual designated in accordance with agency procedures (in this case, the chief of the contracting office). FAR § 3.104-7(a)(1). If that individual agrees with the contracting officer’s analysis, the procurement may proceed; if the individual does not agree, the individual must forward the information to the HCA and advise the contracting officer not to proceed with the award. FAR § 3.104-7(a)(2). Here, as noted, the contracting officer prepared the PID, and that document was reviewed by and concurred with by both the agency’s designated individual, along with the HCA.

A review of the agency’s PID shows that it was confined entirely to a comparison of the differences between how the agency previously satisfied its IT requirements versus how it will meet those requirements going forward. For example, the PID focuses on the fact that the PIVOT I procurement differs from the EDUCATE contract in that the PIVOT I contractor will be required to coordinate among the various other PIVOT contractors rather than building a team of its own subcontractors. AR, exh. M, PID, at 4. In addition, the PID focuses on the fact that there are differences both in the nature of the agency’s IT requirements going forward, as well as the fact that technology has significantly evolved since the award of the EDUCATE contract, such that any technical solutions proposed by DSFG in 2007 would be stale if proposed today. Id. at 4-6.

The protester has identified several concerns relating to the adequacy of the agency’s PID in light of its limited scope, as described above; we share those concerns. First, as pointed out by the protester, there is nothing to show that the agency gave any consideration to the fact that the DSFG proposals included detailed and extensive information relating to how DSFG priced the EDUCATE contract. Of particular concern is the fact that the 2007 DSFG proposal included detailed information relating to DSFG’s labor rates over a 10-year period of time. Specifically, the proposal includes labor rates for ongoing work currently being performed under the EDUCATE contract, under which DSFG is obliged to continue performance at least through November of this year. AR, exh. J, Business Proposal, attach. 9, DSFG labor rates for the EDUCATE contract. (The 2011 DSFG proposal also contains detailed information relating to DSFG’s labor rates and pricing for the work contemplated under that modification, AR, exh. K, DSFG 2011 Proposal. The protester claims that this information also could be competitively useful to the extent that it provides a second point of comparison for DSFG’s pricing and labor rates.) Thus, a review of the DSFG proposals could provide significant insight into DSFG’s current and historical pricing and labor rates, and such information could provide a competitive advantage to SRA that was never considered by the agency in its PID.

Moreover, as also noted by the protester, the DSFG proposals include the firm’s staffing strategies and level of effort for performance of generic work that arguably will be performed under both the EDUCATE and PIVOT contracts, such as the provision of help desk services. AR, exh. J, Business Proposal, Section 2, Business Approach. Such information also could provide a significant competitive advantage to SRA that was never considered by the agency in its PID.

In addition to these concerns, the record also shows that the agency did not critically examine the actions of SRA in connection with the reporting of its receipt of the DSFG proposals. Several things are of particular concern to our Office. First, the record shows that SRA represented that Mr. X was a low-level administrative employee of ClearAvenue. COSF, ¶ 30. In point of fact, as correctly noted by the protester, an examination of the ClearAvenue website shows that Mr. X is ClearAvenue’s chief technology officer, and not merely a low-level employee. See http://www.clearavenue.com/our_team.html (last visited on June 21, 2017).

Second, SRA represented to the agency that it had terminated its teaming agreement with ClearAvenue. In making that representation, SRA referenced a copy of a conflict of interest certification executed by a ClearAvenue corporate officer on January 12, 2017. There is nothing about that document that demonstrates that SRA, in fact, terminated its teaming agreement with ClearAvenue. The document itself was executed more than a month before the disclosure occurred, and several weeks before SRA reported the disclosure to the agency. Once again, as pointed out by the protester, an examination of the ClearAvenue website draws into question this representation on the part of SRA, because SRA currently is listed as a partner of ClearAvenue on that firm’s website. See http://www.clearavenue.com/partners.html (last visited on June 21, 2017).

Finally, SRA downplayed the nature and extent of ClearAvenue’s participation as a teaming partner in connection with the PIVOT proposal effort, describing it as “extremely limited.” AR, exh. D, Letter to the Contracting Officer From SRA’s Counsel, at 1-2. SRA represented that ClearAvenue’s activities were confined to participating in ‘data calls,’ attending meetings, and being provided an opportunity to recommend key personnel for the contract. Id. SRA also stated that it had “no record” of ClearAvenue’s input on the PIVOT I proposal. Id. SRA did not offer any evidence in support of this explanation, and in fact, the teaming agreement entered into between SRA and ClearAvenue is not even included in the record. Accordingly, there is no way either for our Office or the agency to have considered, empirically, the nature and extent of ClearAvenue’s ongoing obligations, its level of participation contemplated under the teaming agreement, or the nature and extent of its actual activities in preparing the SRA response to the PIVOT I solicitation.

In the final analysis, the only evidence in the record shows that ClearAvenue entered into a teaming agreement with SRA in November, 2016; ClearAvenue’s’ chief technology officer had possession of the DSFG proposals throughout this time period; and, ultimately, he provided the proposals to SRA. AR, exh. D, Letter to the Contracting Officer From SRA’s Counsel, at 1. Simply stated, the record shows that SRA was in possession of the DSFG proposals for some period of time, and there is no way objectively to determine, based on the current record, whether ClearAvenue’s chief technology officer shared competitively useful information with SRA by some other means in addition to directly providing SRA copies of the DSFG proposals. No critical analysis of these considerations by the agency ever occurred.

In view of the discussion above, we sustain DSFG’s challenge to the reasonableness of the agency’s determination that disclosure of the DSFG proposals to SRA by ClearAvenue did not adversely impact the PIVOT I competition. We also find that, inasmuch as the agency’s conclusions relating to the remaining PIVOT acquisitions relied on the same limitations outlined above for the PIVOT I competition, that conclusion was similarly unreasonable. We therefore sustain this aspect of DSFG’s protest.  (Dell Services Federal Government, Inc. B-414461, B-414461.2: Jun 21, 2017)

Next, CTC argues that the Navy’s PIA investigation failed to comply with the procedural requirements set forth in FAR subpart 3.1. For the reasons discussed below, we find no basis to sustain the protest.

The procurement integrity provisions of the Office of Federal Procurement Policy Act, as amended, 41 U.S.C. §§ 2101-2107, known as the Procurement Integrity Act, provide, among other things, that a federal government official “shall not knowingly disclose contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” 41 U.S.C. § 2102(a)(1). Additionally, as relevant here, the PIA provides that “[e]xcept as provided by law, a person shall not knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” Id. § 2102(b). Subpart 3.1 of the FAR sets forth the requirements for an agency to investigate allegations raised regarding potential violations of the PIA.

CTC’s protest challenging the current award (B-412795.2) initially argued that the Navy failed to investigate whether ATI’s access to CTC information violated the PIA. Protest (B-412795.2) at 35. On October 25, the Navy requested that we dismiss this argument as untimely because it was based on the same information raised in CTC’s OCI allegations in the prior protest, but was not timely filed. Agency Request for Dismissal (Oct. 25, 2016) at 1-2.

On November 3, we granted the Navy’s request and dismissed the PIA argument. GAO Email (Nov. 3, 2016). We concluded that the protester’s PIA arguments relied upon the same facts as its OCI arguments, and that the protester therefore should have raised its PIA arguments in connection with its initial protest in February 2016. Id. We noted that our Bid Protest Regulations also state that we “will not review an alleged violation of [the PIA] where the protester failed to report the information it believed constituted evidence of the offense to the Federal agency responsible for the procurement within 14 days after the protester first discovered the possible violation.” Bid Protest Regulations, 4 C.F.R. § 21.5(d).

In addition to dismissing this protest argument, however, we noted that it appeared from the record that the Navy nonetheless conducted an investigation of the PIA allegations. On October 31, the agency provided the documents relevant to its report responding to the protest, including the agency’s PIA investigation, which was completed by the contracting officer prior to the current award. AR, Attach. AG, PIA Investigation Report. On November 10, CTC filed a supplemental protest arguing that the Navy’s PIA investigation failed to comply with the procedural requirements of the FAR because the contracting officer failed to notify or seek the approval of the appropriate agency official.

The FAR states that a contracting officer who “receives or obtains information of a violation or possible violation of [the PIA] must determine if the reported violation or possible violation has any impact on the pending award or selection of the contractor.” FAR § 3.104-7(a). If the contracting officer determines that there is no impact on the procurement, he or she must forward the “information concerning the violation or possible violation and documentation supporting a determination that there is no impact on the procurement to an individual designated in accordance with agency procedures.” Id. § 3.104-7(a)(1). If that individual agrees with the contracting officer’s analysis, the procurement may proceed; if the individual does not agree, the individual must forward the information to the HCA and advise the contracting officer not to proceed with the award. Id. § 3.104-7(a)(2).

The record here shows that the Navy chief of the contracting office (CCO) responsible for this procurement was briefed by the contracting officer regarding the PIA allegations. Decl. of Navy CCO (Dec. 12, 2016) at 1. The Navy states that the CCO is the individual designated for receiving notice of PIA allegations under FAR § 3.104-7. Id. The CCO states that the contracting officer briefed him in detail regarding the PIA allegations concerning ATI, and that the CCO concurred with the contracting officer’s conclusion that there was no evidence of a violation of the PIA. Decl. of Navy CCO (Dec. 12, 2016) at 1. On this record, we conclude that the Navy’s PIA investigation complied with the procedural requirements of FAR § 3.104‑7, and therefore find no basis to sustain the protest. (Concurrent Technologies Corporation B-412795.2, B-412795.3: Jan 17, 2017)

On November 18, the agency issued amendment 0009 to the solicitation to include questions and answers. RFP at 24-26. 

As relevant here, the amendment provided the following information:

5. Do all hospital employees need a CAC [Department of Defense Common Access Card]?

ANSWER: No, there are currently three (3) CAC holders to access Government computer[s] to manage hospital supplies/material/ equipment via “Defense Medical Logistics Standard Support (DMLSS) and Defense Property and Accounting System (DPAS) data base systems.

6. Are we required to have separate employees for the three key positions, or can certain roles be dual hatted? For example, the Foreman is required to be certified in shipping hazardous materials. Can the Foreman also serve as the Hazardous Shipper?

ANSWER: Yes.

7. With the removal of the Admin positions, how many CAC positions are required to perform booking procedures as outlined by the PWS?

ANSWER: At least Two (2).

* * * * *

10. According to the PWS [Performance Work Statement] 4.9 Support of Naval Hospital. “As directed by the Contract Manager, the Supply Foreman shall provide supervision and will meet all requirements as described above.” Is the Supply Foreman mentioned in this statement a different position than that of the Key Personnel Foreman?

ANSWER: No.

10(a). If the position referenced is the Key Personnel Foreman, is this position required to be onsite at the hospital at all times during normal working hours?

ANSWER: No.

AR, Tab 3, amend. 0009, at 2-3.

Centerra contends that the agency’s answers to offerors’ questions disclosed proprietary information about Centerra’s staffing under the current contract, resulting in competitive harm to Centerra. Protest at 1. Centerra asserts that as a result of the agency’s disclosure, the agency has negated the competitive price advantage that Centerra would have achieved due to its proprietary staffing approach. Protest at 6.

We have recognized the right of a firm to protect its proprietary data from improper exposure in a solicitation in the context of a bid protest. The Source, B-266362, Feb. 7, 1996, 96-1 CPD ¶ 48 at 2; Ingersoll-Rand Co., B-236391, Dec. 5, 1989, 89‑2 CPD ¶ 517 at 2. As a general rule, proprietary information is that which is marked proprietary or otherwise submitted in confidence to the government. Good Food Serv., Inc., B-260728, June 20, 1995, 95-2 CPD ¶ 123 at 2. Where a protester alleges that such information was improperly disclosed, the record must show that the material involved significant time and expense in preparation and contained material or concepts that could not be independently obtained from publicly available literature or common knowledge, and establish that the protester was competitively prejudiced by the release, before we will sustain the protest. Rothe Dev., Inc., B-279839, July 27, 1998, 98-2 CPD ¶ 31 at 2-3; Ursery Cos., Inc., B-258247, Dec. 29, 1994, 94-2 CPD ¶ 264 at 2; Ingersoll-Rand Co., supra.

With regard to questions 6, 7, 10, and 10(a), we find that the answers provided by the agency merely satisfied the agency’s responsibility to ensure that the solicitation adequately informed offerors of the minimum requirements of contract performance. In this regard, specifications must be sufficiently definite and unambiguous to inform bidders of the minimum requirements of contract performance so they may bid intelligently and on a common basis. See Global Tech. Sys., B-411230.2, Sept. 9, 2015, 2015 CPD ¶ 335 at 19; Sunnybrook, Inc., B-225642, Apr. 10, 1987, 87-1 CPD ¶ 399 at 1-2; Crimson Enters., Inc., B-209918.2, June 27, 1983, 83-2 CPD ¶ 24 at 2-3.

We note that the agency’s answers do not provide information about Centerra’s performance, but rather, they provide factual answers to questions about the minimum requirements of the solicitation. For example, when asked whether the foreman could also serve as the hazardous shipper, the agency simply replied “Yes.” Indeed, even the protester admits that the agency’s answers “inform[ed] all the offerors just what level of effort and proposed technical approach innovations [the agency] was willing to accept.” Comments at 11. We find no basis to conclude that the agency’s answers to these questions provided offerors with anything other than an understanding of whether certain staffing approaches would be acceptable under the solicitation’s requirements, and we find nothing improper in informing all offerors of the agency’s minimum needs.

With regard to the answer to question 5, which stated that “there are currently three (3) CAC holders,” AR, Tab 3, amend. 0009, at 2-3, the agency argues, and we agree, that our decision in Rothe is on point. In Rothe, a potential offeror asked the agency how many personnel were currently working on the predecessor contract. In response, the agency informed offerors of the number of employees currently working on the contract and the number of employees working in a certain area. Rothe protested arguing that the agency had disclosed its proprietary information and destroyed its competitive position in competing for the contract.

We denied the protest, finding that the information disclosed could not “reasonably be considered proprietary to the protester or that its disclosure resulted in any competitive disadvantage to Rothe.” Rothe, supra, at 3. Particularly relevant to the case here, as we noted in Rothe, are that “matters which are fully disclosed by the marketed product (such as the number of personnel performing a services contract monitored by the government) cannot be protected as a trade secret.” Id. Similarly, here, we find that the agency’s disclosure of the number of personnel with CAC cards at one location does not constitute proprietary information. See Arctic Slope World Servs., Inc., B-284481, B-284481.2, Apr. 27, 2000, 2000 CPD ¶ 75 at 5 (there is nothing improper in releasing information on the number of personnel performing an incumbent contract).

In any event, Centerra has failed to demonstrate that it was competitively disadvantaged by the agency’s release of the information. In this regard, the agency notes that the RFP requires services at nine separate locations, including six warehouses, a lumber yard, a hospital supply warehouse, and a hospital galley. AR at 6; COS at 1; RFP at 42-43. Some of these locations are to be manned, while others are unmanned. Id. However, the agency’s response to question 5 was limited to the services at the hospital warehouse. AR at 6. In addition, the agency’s answer provided the number of employees at that location that were required to have a CAC card, not the total number of employees performing services at that location. Id. Further, while the solicitation permits the use of foreign national employees in performance of the contract, the agency did not disclose whether any foreign nationals were currently being used and if so, how many. COS at 7.

Furthermore, the information disclosed did not reveal what labor categories, mix, or rates would be appropriate, or how Centerra would calculate its profit, overhead, and management costs--important elements of price, and in some instances technical approach. Thus, as in Rothe, the agency’s release of the information here may, at best, operate to normalize to a small degree the competition so that all offerors will have a very rough estimate as to how many individuals will be needed for contract performance with regard to one specific area of performance. As such, even if the information disclosed could be considered proprietary, the effect of releasing the information on Centerra’s competitive position under the terms of the RFP is speculative at best and provides no basis to sustain the protest. See Rothe, supra, at 3-4; Ursery Cos., Inc., supra, at 3.  (Centerra Group, LLC B-412271.2, B-412271.3: Feb 26, 2016)  (pdf)

The first draft of the RFP was posted to the Navy’s local business opportunities webpage in June 2014. COS at 3. In July, ESP [incumbent] requested that the agency inform ESP of any historical data the agency intended to release to potential vendors so that ESP could redact data it did not wish released.  (sentence deleted)  For each location, ESP redacted all supply support allowance amounts, labor categories, the numbers of employees in each category, and the total number of employees. Protest, exh. F. The agency posted the redacted monthly reports on its local business opportunities webpage.

Thereafter, on August 28, 2014, the agency states that it inadvertently posted the IGCE as part of the RFP documents. COS at 3. The IGCE provided an estimated labor category mix for each location and the supply support allowance estimates for all seven locations. Id. at 1-10. The IGCE stated that its labor mix for each location was based on current contracts, and noted that this was because the basic requirements have not changed. Id.

(paragraph deleted)

On September 9, ESP notified the agency that it considered the release of the IGCE to be a potential [Procurement Integrity Act]  PIA violation, asserting that it included information that was confidential and proprietary to ESP. AR, Tab 4. On September 15, the Navy removed from its business opportunities webpage all draft postings it had made prior to September 8, including the IGCE, and replaced them with the final RFP package that had been posted on September 8, which did not contain the IGCE. COS at 5. Before the agency responded to ESP’s notification of a potential PIA violation, ESP filed this protest with our Office on September 22.

The procurement integrity provisions of the PIA provide that “[e]xcept as provided by law, a [Federal Government official, acting on behalf of a Federal Agency procurement] shall not knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” 41 U.S.C. § 2102(b).

As an initial matter, we do not believe that ESP has shown that the release of information on which its protest is based is encompassed by either PIA or FAR provisions. First, as described by the protester, the information at issue here--cost figures in the IGCE that “were derived from FY14 costs on the current [Price Breakout Worksheets]” from incumbent contracts or task orders, including one being performed by the protester—is not “contractor bid or proposal information”; rather, it is information that was generated during the performance of a contract or task order. See Protest at 4. We see a distinction between the protester’s monthly reports and, for example, the labor mix or technical approach in a competitor’s proposal. Moreover, the release of information was not made in connection with “the award of a Federal agency procurement contract to which the information relates”--rather, the information was released in connection with a subsequent procurement that differs from preceding contracts.

(paragraphs deleted)

An unfair competitive advantage is a necessary element of a procurement integrity allegation since it relates to the resulting prejudice. Health Net Fed. Servs., LLC, B‑401652.3, B-401652.5, Nov. 4, 2009, 2009 CPD ¶ 220 at 31. Even where a protester shows an actual or potential PIA violation, our inquiry does not end there. Rather, the question becomes whether the alleged PIA violation created an unfair competitive advantage. See, e.g., Unisys Corp., B-403054.2, Feb. 8, 2011, 2011 CPD ¶ 61 at 10 (protest that awardee’s use of former government employee in preparation of its proposal provided the firm with unfair competitive advantage due to employee’s access to protester’s proprietary information denied where record reflects that the information at issue was not competitively useful).

The record here shows that even the most recent (2014) ESP Task Order includes only some of the work required by the RFP. For example, the RFP includes requirements at two new locations that were not covered by the 2014 ESP Task Order, and includes new trainer support gear maintenance work at two of the current locations. COS at 8. Furthermore, the RFP does not include some requirements at four of the current locations in the 2014 ESP Task Order. Id. at 8-9. The RFP does not address how these different requirements have affected the labor mix numbers cited in the IGCE, even though, as discussed below, most of them differ from those found in ESP’s monthly reports.

Based upon our reading of the record, the IGCE’s estimated labor mixes and total number of employees matched only one of the five locations currently serviced by ESP. ESP itself estimates that its current task order is smaller, reflecting work that is only a portion of the work contemplated by the RFP. Comments at 16. Even if we were to accept ESP’s estimate, the fact remains that a significant portion of the work is not covered by the 2014 ESP Task Order. See Rothe Dev., Inc., B-279839, 98-2 CPD ¶ 31 at 3 (protester was not competitively disadvantaged by disclosure of information from prior contract where 20 percent of the work was not covered by the predecessor RFP).

Finally, we are not persuaded that release of the IGCE estimates of labor mix, or even the total number of employees, unfairly disadvantages ESP. As discussed above, these estimates are pertinent to only part of the requirements at issue. Further, even with respect to the efforts and locations that were covered by the 2014 ESP Task Order, the disclosure did not reveal how ESP calculated its profit, overhead, administrative and maintenance costs--all significant elements of the overall management and support price. See Ursery Cos. Inc., B‑258247, Dec. 29, 1994, 94-2 CPD ¶ 264 at 3. On this record, we find no basis to sustain the protest.  (Engineering Support Personnel, Inc. B-410448: Dec 24, 2014)  (pdf)

Nexagen and LinTech contend that GSA refused to investigate the alleged procurement integrity violation, arguing, as before, that the disclosure of the OASIS market research requires the agency to cancel the solicitation, terminate the contracts, and conduct a new competition. See, e.g., Nexagen Protest at 2. The protesters contend that the disclosure directly resulted in many of the awardees for pools 1 and 3 achieving their top 40 ranking. See, e.g., LinTech Protest at 2. Nexagen and LinTech contend the market research “reveal[s] the mental process of the decision‑makers.” See, e.g., Nexagen Comments at 5, citing AAI Aff.

In this regard, the protesters state that they learned from AAI, after contract awards, that AAI supposedly assisted a number of OASIS awardees in preparing their proposals, advising them to “strategically focus past performance” on those federal customer agencies noted in the Business Case, because GSA is marketing OASIS to certain federal customer agencies and is looking for those agencies’ “buy-in” to the OASIS program. Id. at 5-6, 8; LinTech Comments at 15. The protesters insist that, but for some awardees’ reliance on the market research in selecting relevant experience projects to cite in their proposals, Nexagen’s and LinTech’s proposals would have been ranked in the top 40 ranking for their respective pools, and the firms would have received contract awards. See, e.g., Nexagen Comments at 3.

GSA replies that the RFP’s point system was completely transparent to offerors, such that knowledge of any information in the Business Case would confer no advantage in selecting what relevant experience to cite in an offeror’s proposal. Nexagen AR at 5. Moreover, the agency asserts that the identity of the federal agency for an offerors’ relevant experience projects had nothing to do with how proposals were scored, and cites the RFP’s scoring table and offeror self‑scoring sheets in that regard. LinTech AR at 5; see RFP at 104; attachs. 5.A., Self‑Scoring Worksheet; 5.B., Sample Self-Scoring Worksheet. The protesters dispute GSA’s arguments that the RFP’s evaluation scheme is objective, on the grounds that the solicitation requires offerors to provide written details regarding their relevant experience projects, which, according to the protesters, can only be evaluated subjectively. See, e.g., LinTech Comments at 13‑14.

The procurement integrity provisions of the Office of Federal Procurement Policy Act, as amended, 41 U.S.C. §§ 2101-2107 (2011), commonly known as the Procurement Integrity Act (PIA), provide that “[e]xcept as provided by law, a person shall not knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” 41 U.S.C. § 2102(b). The disclosure of source selection information, including an offeror’s price, during the course of a procurement is improper and the agency may take remedial steps, including canceling the procurement, if it reasonably determines that the disclosure harmed the integrity of the procurement process. Information Ventures, Inc., B-241441.4, B-241441.6, Dec. 27, 1991, 91-2 CPD ¶ 583 at 4-5. Where an agency decides that no remedial steps are necessary, we will sustain a protest based on the improper disclosure only where the protester demonstrates that it was in some way competitively prejudiced by the disclosure.  Y&K Maint., Inc., B-405310.6, Feb. 2, 2012, 2012 CPD ¶ 93 at 9.

An unfair competitive advantage is a necessary element of a procurement integrity allegation since it relates to the resulting prejudice. Health Net Fed. Servs., LLC, B‑401652.3, B‑401652.5, Nov. 4, 2009, 2009 CPD ¶ 220 at 31. Even where a protester shows an actual or potential PIA violations, our inquiry does not end there. Rather, the question becomes whether the alleged PIA violation created an unfair competitive advantage. See, e.g., Unisys Corp., B-403054.2, Feb. 8, 2011, 2011 CPD ¶ 61 at 10 (protest that awardee’s use of former government employee in preparation of its proposal provided the firm with unfair competitive advantage due to employee’s access to protester’s proprietary information denied where record reflects that the information at issue was not competitively useful).

Nexagen and LinTech essentially suggest that, had they been able to consider the OASIS market research in preparing their proposals, as other offerors allegedly did, the protesters would have been able to claim higher points by emphasizing more relevant experience. Notably, although the protesters were provided (by AAI) unredacted copies of the OASIS Business Case and its underlying market research documents during the course of this protest, the protesters have not identified any aspect of that research to support their prejudice arguments, nor identified any aspects of their proposals (including their relevant experience projects) that they would have changed based on information contained in the documents. Moreover, as we note above, neither Nexagen, nor LinTech protested the evaluation of their proposals.

Here, GSA concluded that no remedial steps (beyond requesting deletion and destruction of the documents) were necessary in response to the PIA allegations. Based on our review of the record--including the Business Case, market research, source selection and acquisition plans, and solicitation, as well as our review of the evaluation record in response to seven protests of the small business awards, see Aljucar, Anvil-Incus & Co.; ADNET Sys., Inc., et al.; Planned Sys. Int’l; Tech. Prof’l Servs., Inc., supra--nothing supports the protesters’ assertions that they were competitively prejudiced by the disclosure of the agency’s market research. To the extent that the protesters suggest that the evaluation of offerors’ narrative descriptions of their relevant experience projects is necessarily subjective, the RFP provided for a pass/fail acceptability evaluation and further evaluation of projects based, not so much on qualitative criteria, but largely on whether an offeror submitted the requisite documentation to substantiate the points it claimed in self-scoring its projects. RFP at 130-41; see ADNET Sys., Inc., et al., supra, at 5 n.13. Thus, we agree with GSA that the RFP’s self-scoring point scheme is largely objective. As GSA explains, the evaluation approach allocated to offerors the burden of accurately claiming the proper number of points and submitting proper documentation in that regard, and allocated to the agency the burden of validating those claims. In other words, the solicitation’s admittedly novel evaluation approach largely left it to the offerors to sort themselves based on a self-scoring point system, and any further evaluation was largely limited to an offeror’s strict adherence to the RFP’s instructions and documentation requirements. See ADNET Sys., Inc., et al., supra, at 8-16; Planned Sys. Int’l; Tech. Prof’l Servs., Inc., supra, at 7-8.

We find that GSA reasonably concluded that the protesters were not competitively prejudiced by the inadvertent disclosure of this information to AIA. In addition, the protesters have not identified any aspects of the inadvertently disclosed materials that support their prejudice arguments. See Y&K Maint., Inc., supra.

These protests are denied.  (Nexagen Networks, Inc.; LinTech Global, Inc., B-408685.15, B-408685.17: Jul 28, 2014.)  (pdf)

PROCUREMENT INTEGRITY ACT

GEO again alleges that CFS violated the PIA, asserting that it is implausible that CFS did not utilize confidential GEO information obtained by the CFS CEO in preparing its proposal, and that the agency erred in ignoring this PIA violation. However, our review of the record demonstrates that the agency acted in accordance with applicable regulations in reviewing the alleged PIA violation, reasonably concluded that no violation occurred, and properly determined to continue with the procurement.

The PIA provides that "[a] person shall not, other than as provided by law, knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates." 41 U.S.C. sect. 423(b). FAR sect. 3.104-3(a) dictates that a contracting officer who receives or obtains information of a possible violation of the PIA must determine if the possible violation has any impact on the pending award or selection of the contractor. If the contracting officer concludes that a violation may impact the procurement, the contracting officer is required to report the matter to the head of the contracting activity (HCA). FAR sect. 3.104-7(b). The HCA must review the information and take appropriate action, which includes either: 1) advising the contracting officer to proceed with the procurement; 2) beginning an investigation; 3) referring information to appropriate criminal investigative agencies; 4) concluding that a violation occurred; or 5) recommend to the agency head that a violation has occurred and void or rescind the contract. Id. In the case of the BOP, the Justice Acquisition Regulation (JAR) further directs the contracting officer to refer possible violations of the PIA to the DOJ OIG. JAR sect. 2803.104-10.

Here, the agency followed exactly the procedures set forth above in investigating the alleged violation. Upon receiving information concerning a potential PIA violation from GEO, the contracting officer referred the matter to the HCA and the DOJ OIG. The DOJ OIG then thoroughly investigated the record, conducted interviews, and analyzed GEO computers before concluding that there was no indication of theft of GEO property or proprietary information, and no information to substantiate a PIA violation. On the basis of the investigation results, the HCA directed the contracting officer to proceed with the procurement. On this record, we see no basis to conclude that a PIA violation occurred, or that the agency's actions were unreasonable.

GEO alleges that the DOJ OIG and BOP investigations failed to reasonably consider declarations of GEO's business manager stating that the CFS CEO requested, and was provided with, a draft of GEO's price proposal for this procurement prior to his resignation. In its rejection of this allegation, the agency reasonably questioned the credibility of GEO's allegations given that they were inconsistent with previous statements made by GEO's business manager to the DOJ OIG. As noted above, the DOJ OIG report states that "OIG interviewed . . . the Business Manager for GEO's New York City RRC properties" and "[The business manager] stated she did not share any pricing materials with [the CFS CEO]." DOJ OIG Abbreviated Report, at 3. In any event, the agency argues, and we agree, that any protected pricing materials obtained by the CFS CEO in this manner are covered by the PIA's "savings clause," which provides in relevant part that "[t]his section does not . . . restrict a contractor from disclosing its own bid or proposal information or the recipient from receiving that information." 41 U.S.C. sect. 423(h)(2).[4]

GEO objects to the application of the PIA savings clause in this context. GEO argues that where the CFS CEO failed to disclose his interest in CFS to GEO, and purposefully lied to GEO in breach of his fiduciary duties and GEO's code of ethics, the savings clause protections of the PIA have been waived. We disagree. We have repeatedly determined that the PIA's savings provisions apply notwithstanding the fact that the voluntarily provided information is subsequently misused or not properly safeguarded. See, e.g., Telephonics Corp., B-401647, B-401647.2, Oct. 16, 2009, 2009 CPD para. 215 at 6; Pemco Aeroplex, Inc., B-310372, Dec. 27, 2007, 2008 CPD para. 2, at 12. Here, GEO voluntarily provided its confidential information to the CFS CEO in the course of his employment with GEO. The CFS CEO's alleged misuse of that information in transferring it to CFS, breach of his fiduciary duties to GEO, or breach of GEO's corporate code of ethics, are matters of a private dispute not for resolution by our Office.  (The GEO Group, Inc, B-405012, July 26, 2011)  (pdf)

East West contends that NIH officials committed a procurement integrity violation by sharing "procurement-related" information with Integrity regarding the contract award prior to making an official award.

The Procurement Integrity Act, 41 U.S.C. sect. 423(a) (2006), prohibits any present or former official of the United States, with respect to a federal agency procurement, from "knowingly" disclosing contractor bid or proposal information or source selection information before the award of a federal agency procurement contract to which the information relates. The statute defines source selection information to include bid and proposal prices, source selection and technical evaluation plans, technical and cost/price evaluations of proposals, competitive range determinations, rankings of bids/proposals, and reports/evaluations of source selection panels, boards, or advisory councils. 41 U.S.C. sect. 423(f)(2).

While, as the agency has acknowledged in notifying our Office that it intended to take corrective action in response to East West's supplemental protest, there were defects in the award process here, the record fails to demonstrate that a prejudicial procurement integrity violation occurred. There is no evidence that any agency official disclosed East West proposal information to Integrity. Further, the only item arguably fitting within the definition of source selection information that was disclosed was that Integrity's proposal had been selected for award, and the protester has not shown that it suffered any prejudice--prejudice being an essential element of every viable protest--as a result of Integrity's having received notification of its selection several weeks prior to other offerors being notified. See Landsing Pacific Fund, B-237495, Feb. 22, 1990, 90-1 CPD para. 200 at 5; Theodor Arndt GmbH & Co., B-237180, Jan. 17, 1990, 90-1 CPD para. 64 at 6.

The protester further argues that agency officials treated the offerors disparately and demonstrated bias in favor of Integrity by (1) communicating with Integrity, but not the protester, regarding the content of its proposal prior to award, and (2) communicating to Integrity that it was in line for award, while failing to disclose this information to East West. In response to the first allegation, the agency notes that the communications in question took place after Integrity had been selected for award; the agency also argues that the exchanges did not constitute improper discussions because Integrity was not given the opportunity to revise its proposal in response to them. Moreover, even if the exchanges that took place at the May 5 meeting pertaining to Integrity's proposed staffing plan could arguably be viewed as a reopening of discussions, there is no evidence that the protester was prejudiced by the agency's failure to also reopen discussions with it--and, in any event, the corrective action proposed by the agency renders the matter academic. With regard to the protester's allegation that agency officials demonstrated bias in favor of Integrity by notifying it that it was in line for award while representing to East West that they did not know why Integrity representatives were behaving as if they had been notified of award, even to the extent that the agency's representations were misleading, we fail to see that they in any way establish bias on the part of agency officials in the source selection process.

Finally, East West argues that the agency's procurement integrity investigation was inadequate because the contracting officer who conducted it was aware of (despite not being present at) the meeting between NIH officials and Integrity representatives on November 5 and thus was arguably implicated in the alleged wrongdoing. The protester has not demonstrated--and we fail to see--how mere awareness of the meeting demonstrates wrongdoing on the part of the contracting officer.  (East West, Inc., B-400325.7; B-400325.8, August 6, 2010)  (pdf)

DME states that, during the procurement, Aeroflex hired a (now-former) DME employee who had access to DME's proprietary pricing data. DME asserts that, because Aeroflex lowered its proposed price between submission of initial and final revised proposals, the former DME employee must have provided DME's pricing information to Aeroflex. Accordingly, DME maintains that Aeroflex violated the statutory procurement integrity provisions, 41 U.S.C. sect. 423 (2000), which prohibit an offeror's unauthorized acquisition of a competitor's proprietary information. Based on this allegation, DME asserts that award to Aeroflex was improper.

Both our Bid Protest Regulations and the statutory procurement integrity provisions require--as a condition precedent to our consideration of an alleged procurement integrity violation--that a protester have reported the matter to the contracting agency within 14 days of becoming aware of the possible violation. This 14‑day reporting requirement affords procuring agencies an opportunity to timely investigate alleged improprieties before completing a procurement and, in appropriate circumstances, to take remedial action. See 41 U.S.C. sect. 423(e)(3); Honeywell Tech. Solutions, Inc., B-400771, B-400771.2, Jan. 27, 2009, 2009 CPD para. 49 at 9.

Here, DME failed to comply with the statutory and regulatory reporting requirements that constitute a condition precedent to our jurisdiction. Specifically, the record contains a letter from counsel for DME to Aeroflex, dated June 9, 2009, expressly accusing the former DME employee of disclosing DME's proprietary information (including pricing) to Aeroflex, stating:

[The former DME employee] owed DME a duty not to appropriate DME's confidential information. We are concerned, therefore, that while at DME, [the former DME employee] had full access to DME's work on the U.S. Marine Corps System Command for the Ground Radio Maintenance Automatic Test System, or "GRAMATS," a project in which we understand Aeroflex is interested. . . .

[The former DME employee], of course recently left DME's employment and joined Aeroflex. DME has discovered that while employed with DME [the former DME employee] was in communication with Aeroflex about aspects of his forthcoming employment with Aeroflex and, then or later, shared with Aeroflex information about DME's customers, products and pricing. [Emphasis added.]

AR, Tab 21, Letter from Counsel for DME to Aeroflex, June 9, 2009, at 1-2.

Notwithstanding DME's specific assertion in June 2009 that the former DME employee had "shared with Aeroflex information about DME's customers, products and pricing," DME failed to report this matter to the agency until September. That is, DME delayed complying with the reporting requirement until after it learned it had not been selected for award, and more than 3 months after, by its own admission, it "discovered" information leading DME to conclude that its former employee had provided DME's pricing information to Aeroflex.

On this record, DME clearly failed to comply with the 14-day reporting requirement regarding the alleged procurement integrity violation. Accordingly, we will not consider DME's allegations in this regard.  (DME Corporation, B-401924; B-401924.2, December 22, 2009) (pdf)

For the purpose of evaluating the cost and price information contained in Health Net's initial proposal, TMA "TRICARE Management Activity" sought the assistance of the Defense Contract Audit Administration (DCAA). DCAA provided TMA with a report dated September 24, 2008, in which it questioned [DELETED] as it related to Health Net's proposed [DELETED]. Agency Report (AR), Tab 12, Price/Cost Team Report, at 12.

The record reflects that on October 8, 2008, before final proposals were due, DCAA provided a summary of these audit findings to the DOD Office of the Inspector General (OIG) for inclusion in a statutorily required report to Congress, referred to as the DOD OIG's Section 845 Annex of Audit Reports with Significant Findings, issued as an attachment to the DOD OIG's Semiannual Report to Congress for the period from April 1 to September 30, 2008.¹ 

(Section deleted)

On December 15, 2008, the DOD OIG SemiAnnual Report to Congress, which included the 845 Annex, as well as a separate classified Annex on Intelligence-Related Oversight, was delivered to various Congressional offices.[5] Two days later, on December 17, the DOD OIG posted the Semiannual Report on its Internet website. Importantly, the record demonstrates, and is undisputed in this regard, that when the Semiannual Report was initially posted, it did not include the 845 Annex; rather, the 845 Annex was later posted on January 6, 2009, the day after final proposals under the RFP here were due. See Declaration of Deputy to the Assistant Inspector General for Communications and Congressional Liaison, DOD OIG, July 31, 2009, and Declaration of DOD OIG Web Team Chief, July 31, 2009.

On June 19, 2009, one day after it allegedly discovered that the 845 Annex, which contained pricing information regarding its initial proposal, had been posted on the DOD OIG website, Health Net sent the contracting officer a letter, reporting the disclosure as a potential violation of 41 U.S.C. sect. 423(a)(1). The 845 Annex was removed from the DOD OIG website that same day.

Thereafter, the contracting officer conducted an investigation of the matter and concluded that any possible violation of the statutory procurement integrity provisions had no impact on the competition. He based his determination in this regard on the fact that the public release of the proposal information on the DOD OIG website occurred on January 6, one day after final proposals were due, thus there was no possibility that competing offerors could have utilized this information for the purposes of the competition. In addition, he noted that to the extent the information had been provided to Congress, it was submitted shortly before final proposals were due; the competing offeror, AGHP, certified that it had no knowledge of Health Net's proposal information; an analysis of AGHP's final proposal revision did not show any evidence that it had made pricing changes based on the information provided to Congress; and [DELETED]. See Contracting Officer's (CO) Memorandum for the Record, June 26, 2009. Upon learning of the contracting officer's decision in this regard, Health Net filed this protest.Discussion

Health Net argues that the integrity of the procurement process has been compromised 1) as a consequence of DOD's violation of the statutory procurement integrity provisions by disclosing, prior to award, Health Net's proprietary pricing and proposal information on a publicly accessible website and 2) because DOD submitted Health Net's proprietary proposal information to Congress, prior to the time final proposals were due, without identifying the information as competitively sensitive and relevant to an ongoing government procurement. In connection with the latter point, Health Net argues that the contracting officer failed to conduct a reasonable investigation regarding potential subsequent disclosures of Health Net's proprietary information.

We recognize that serious errors occurred in connection with DOD's handling of Health Net's price/cost information during the pendency of an active procurement. Simply put, Health Net's pricing information, as contained in the 845 Annex, should not have been posted to a public website prior to contract award, nor should it have been submitted to Congress without any indication that it contained contractor bid or proposal information related to the conduct of a Federal agency procurement and an indication that further disclosure of the information was restricted by the procurement integrity laws. Notwithstanding these errors, however, we find that the contracting officer reasonably concluded that the competition was not compromised.

The disclosure of source selection information, including an offeror's price, during the course of a procurement is improper and the agency may take remedial steps, including canceling the procurement, if it reasonably determines that the disclosure harmed the integrity of the procurement process. Information Ventures, Inc., B-241441.4, B-241441.6, Dec. 27, 1991, 91-2 CPD para. 583 at 4-5. Where an agency decides that no remedial steps are necessary, we will sustain a protest based on the improper disclosure only where the protester demonstrates that it was in some way competitively prejudiced by the disclosure. Kemron Envtl. Servs., Inc., B-299880, Sept. 7, 2007, 2007 CPD para. 176 at 2. Here, the record reflects that Health Net was not competitively prejudiced by DOD's mishandling of its pricing information.

As noted above, the record reflects that the 845 Annex was not posted on the DOD OIG website until 1 day after final proposals were due. Thus, even assuming that AGHP accessed the website and learned the information contained in the Annex, it could not possibly have used it to its advantage in the competition. Health Net suggests that AGHP could have learned the information as a consequence of the disclosure to Congress, which occurred before final proposals were due, and argues that the contracting officer has yet to adequately investigate this possibility. Setting aside the fact that such a disclosure seems improbable given the short period of time from when the information was delivered to Congress and final proposals were due (approximately 3 weeks), and the fact that a period of that time included the Christmas and New Years holidays, the contracting officer reasonably determined that there was no evidence that AGHP's pricing changes were the result of its having known of the information set forth in the 845 Annex. In this regard, the contracting officer obtained an analysis regarding AGHP's pricing revisions in its final proposal which indicated that AGHP explained all of its pricing changes, that the changes were the direct result of discussions or otherwise resulted in price increases, and [DELETED]. See CO's Memorandum for the Record, June 26, 2009.

Moreover, even if we assume that AGHP did in fact learn Health Net's pricing information, as reflected in the section 845 Annex, before final proposals were due--an assertion that AGHP vehemently denies--Health Net has failed to explain how AGHP could have used the information to its advantage given the fact that [DELETED]. While such knowledge might have [DELETED]. In fact, armed with such knowledge, one might reasonably expect AGHP [DELETED], which at most would appear to disadvantage only the government, not Health Net.

In sum, based on the record here, we find that there is no basis for concluding that Health Net was competitively prejudiced as a consequence of DOD's improper handling of its pricing information.  (Health Net Federal Services, LLC, B-401652, October 13, 2009) (pdf)

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¹  Section 845 of the National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-81, requires DCAA to provide to the DOD OIG “an annex on final, completed contract audit reports . . . containing significant audit findings” for inclusion in the DOD OIG’s semi-annual report submitted to Congress pursuant to the Inspector General Act of 1978. As relevant to the protest, it provides that there is no requirement to release information to the public that is exempt from public disclosure under the Freedom of Information Act (FOIA), 5 U.S.C. sect. 552(b).

Our Office has recognized that, in meeting their responsibility to safeguard the interests of the government in its contractual relationships, contracting officers are granted wide latitude to exercise business judgment, FAR sect. 1.602-2, and may impose a variety of restrictions, not explicitly provided for in the regulations, where the needs of the agency or the nature of the procurement dictates the use of those restrictions. Compliance Corp., B‑239252, Aug. 15, 1990, 90-2 CPD para. 126 at 5, aff'd, B-239252.3, Nov. 28, 1990, 90-2 CPD para. 435 at 4. For example, a contracting officer may protect the integrity of the procurement system by disqualifying an offeror from the competition where the firm may have obtained an unfair competitive advantage, even if no actual impropriety can be shown, so long as the determination is based on facts and not mere innuendo or suspicion. NKF Eng'g, Inc., B‑220007, Dec. 9, 1985, 85-2 CPD para. 638 at 5; NKF Eng'g, Inc. v. United States, 805 F.2d 372, 376-77 (Fed. Cir. 1986); Compliance Corp., supra; Compliance Corp. v. United States, 22 Cl. Ct. 193, 199-204 (1990), aff'd, 960 F.2d 157 (Fed. Cir. 1992). It is our view that, wherever an offeror has improperly obtained proprietary proposal information during the course of a procurement, the integrity of the procurement is at risk, and an agency's decision to disqualify the firm is generally reasonable, absent unusual circumstances. See Compliance Corp., supra (disqualification of offeror reasonable where based on its improperly obtaining or attempting to obtain competitor's proprietary information); NKF Eng'g, Inc., supra, at 6 (disqualification not unreasonable where there was "mere possibility" that offeror did not obtain an advantage from source selection information).

Here, there is no question that the cost/price evaluation summary that was attached to the contacting officer's 6:35 p.m., September 23 e‑mail included information that was source selection sensitive, and information that was proprietary to KBR and its competitors that was relevant to the LOGCAP IV task order competitions. Nor, based on the statement and affidavit of KBR's LOGCAP IV program manager, is there any question that the program manager, at a minimum, knowingly obtained that source selection sensitive and proprietary information by accessing the 6:35 p.m., September 23 e‑mail and attachment; that he did so even though he had been previously advised by the agency that the e‑mail and its attachment should be deleted without being viewed; and that he did so after he had in fact advised the agency that he had complied with the direction to delete the e‑mail and its attachment. Accordingly, in our view, the agency's actions were based on facts, rather than mere innuendo, as is asserted by the protester.

We also reject KBR's assertion that the question of whether KBR's program manager improperly gained access to the sensitive information at issue here can be resolved by reliance on the KBR LOGCAP IV program manager's statement that he merely viewed the first page of the cost/price evaluation summary before closing the document, and the he does not remember or retain any source selection sensitive or proprietary information that would be competitively useful to KBR. Since the KBR program manager is the individual whose actions are in question, and KBR is the firm that has been disqualified from the competition, the program manager's self-serving statement that he did not "read" the cost/price evaluation summary, and KBR's self-serving assertion that the program manager does not have anything more than a "cursory knowledge about the message or its contents," cannot, in our view, be accorded controlling weight without some corroborating evidence, in our consideration of whether the agency's disqualification of KBR from the LOGCAP IV task order competitions in question was reasonable. See Computer Tech. Assocs., Inc., B‑288622, Nov. 7, 2001, 2001 CPD para. 187 at 6; see also AR, Tab 7, KBR LOGCAP IV Program Manager's Statement; KBR LOGCAP IV Contracts Manager's Letter to Contracting Officer (Oct. 6, 2008).

In sum, we find reasonable the agency's determination here that KBR's LOGCAP IV program manager knowingly and improperly obtained access to source selection sensitive and proprietary information, and thus, under the circumstance here, determined that action needed to be taken to protect the integrity of the procurement system. As such, we next turn to KBR's specific assertion that the disqualification of KBR from the Udairi Airfield and TMDE LOGCAP IV task order competitions was unreasonable.

As set forth above, the record reflects that the agency first considered whether any action should be taken with regard to the task order solicitation and competition for which the cost/price evaluation summary was prepared. We note that the agency determined that because proposals had been submitted prior to the cost/price evaluation summary being disclosed to KBR's program manager, and offerors, including KBR, were not provided with an opportunity to revise their proposals, the potential impact on the integrity of that procurement did not merit the disqualification of KBR or the taking of any other action specific to that procurement. Turning to the competitions at issue here, the agency found that since the competitions were open, that is, the Udairi Airfield and TMDE solicitations were issued on September 24 and 30, respectively, with each having the closing date of October 22, the actions of KBR's program manager, which led the agency to conclude that the cost/price evaluation summary either may have been compromised or at least created the appearance that the cost/price evaluation summary was compromised, necessitated that the program manager be isolated from these competitions. Under the circumstances here, we cannot find unreasonable the contracting officer's request that, in order to preserve the integrity of the procurement system, the KBR program manager be isolated from these competitions. Nor can we find the agency's subsequent determination that KBR be disqualified from these competitions to be unreasonable, in light of KBR's refusal to isolate its program manager from these competitions when requested to do so by the agency. That is, although KBR complains that the agency's disqualification of KBR from these competitions was unduly severe, the record reflects that this action was taken by the agency only after KBR refused the agency's request to isolate the program manager. Given the circumstances, which include KBR's initial refusal to isolate its LOGCAP IV program manager from these open LOGCAP IV task order solicitations, we find the agency's elimination of KBR's proposals from these task order competitions to be reasonable and within the discretion granted to the contracting officer.  (Kellogg Brown & Root Services, Inc., B-400787.2; B-400861, February 23, 2009) (pdf)

On March 6, 2007, the agency sent each offeror in the competitive range an e-mail containing discussion items to address. On March 7, WRS advised the agency by telephone that it had received Kemron’s discussion letter. WRS explained that the company treasurer received the e-mail and started scanning it, but noticed that the letter referred to companies that were not named in its proposal. Agency Report (AR) at 2. At that point, the treasurer looked at the top of the letter and found that it was addressed to Kemron. After telephoning the company president for instructions on how to proceed, he sent the e‑mail back to the agency and destroyed all copies. The treasurer advised EPA that he did not recall any specific information from the letter. Subsequently, on March 19, the agency received revised proposals and, on April 5, final proposal revisions (FPR). After evaluating the FPRs, the agency selected the three lowest-priced proposals for award, including WRS’s, which was the second lowest priced proposal. Kemron’s proposal was fourth-low, and the firm complains that it was harmed by the disclosure of its pricing. 

The disclosure of proprietary or source selection information, including an offeror’s price, to an unauthorized person during the course of a procurement is improper. Information Ventures, Inc., B-241441.4, B-241441.6, Dec. 27, 1991, 91-2 CPD para. 583 at 4; Motorola, Inc., B-247937.2, Sept. 9 1992, 92-2 CPD para. 334 at 9. Where an agency inadvertently discloses an offeror’s proprietary information, the agency may choose to cancel the procurement if it reasonably determines that the disclosure harmed the integrity of the procurement process. Information Ventures, Inc., supra, at 4-5; Norfolk Shipbuilding & Drydock Corp., B-247053.5, June 11, 1992, 92-1 CPD para. 509 at 4-5. Where an agency chooses not to cancel the procurement after such a disclosure, we will sustain a protest based on the improper disclosure only where the protester demonstrates that the recipient of the information received an unfair advantage, or that it was otherwise competitively prejudiced by the disclosure. Motorola, Inc., supra, at 9; Gentex Corp.--Western Operations, B-291793 et al., Mar. 25, 2003, 2003 CPD para. 66 at 8-9. Here, the record shows that Kemron was not competitively prejudiced by the disclosure. EPA reviewed WRS’s revised proposal and FPR prior to making its award decisions, found that WRS did not use Kemron’s price information, and concluded that cancellation of the RFP thus was not warranted. In this regard, the agency explains that the Kemron discussion letter WRS received included Kemron’s rates for only 1 of 15 labor categories (equipment operator), and for only 7 of 73 pieces of equipment. AR at 4. With respect to the labor category, in its revised proposal WRS reduced all of its labor rates based on instructions EPA had provided in WRS’s own discussion e-mail. AR at 4. Specifically, in its initial proposal WRS included the cost of personal protective equipment in its loaded hourly labor rate before applying profit (calculated as a percentage of the loaded hourly rate). During discussions, the agency informed WRS that the cost of personal protective equipment should be added after applying profit to the hourly rate; WRS changed its labor rates in its revised proposal accordingly. AR at 4. WRS did not then change any labor rates in its FPR. Regarding equipment, WRS’s revised proposal increased the daily rates for two of the seven items for which Kemron’s prices were revealed--a pickup truck and an excavator. WRS explained that it was raising the daily rate for the truck (its rate already had been higher than Kemron’s) from [DELETED] to [DELETED], to correct a miscalculation, and for the excavator from [DELETED] to [DELETED], because its initial price incorrectly had been based on owning the excavator, rather than leasing it from Hertz, as was intended. AR at 4-5. In its FPR, WRS lowered the rates for four pieces of equipment and raised the rate for four. These changes included only one rate--for the excavator--that had been revealed to WRS; WRS raised the excavator rate to [DELETED] because Hertz raised the rental rate. AR at 6. The agency concluded that, given the nature of the changes in WRS’s proposal, there was no basis for finding that Kemron was prejudiced by the disclosure.


Kemron argues that it suffered competitive harm from--and, more generally, that the integrity of the procurement system was harmed by--the disclosure because, despite EPA’s explanation, the information disclosed was sufficient to allow WRS to “reverse engineer” Kemron’s prices, and then adjust its price so that it would be as high as possible without exceeding Kemron’s price. Kemron notes, in this regard, that the price difference between the two proposals decreased from four percent in the initial offers to only one percent in the FPRs. Kemron’s arguments do not persuade us that WRS gained a competitive advantage, that it was otherwise competitively prejudiced, or that the integrity of the procurement system suffered harm as a result of the disclosure of Kemron’s prices. First, Kemron’s total price was not disclosed, and Kemron has not explained, and we fail to see, how WRS would be able to derive Kemron’s total price from only 1 of Kemron’s 15 labor rates, and only 7 of its 73 equipment rates. Kemron’s mere assertion in this regard, without any supporting explanation or evidence, is not sufficient to establish that WRS was able, even theoretically, to ascertain Kemron’s total price from the disclosed information. Moreover, even if we assume that WRS was able to determine Kemron’s initial total price, there is no evidence supporting Kemron’s claim that WRS was then somehow able to target its FPR price to a level just below Kemron’s. In this regard, in order for WRS to accomplish this result, WRS would have had to know how Kemron would revise its price following discussions. Since WRS was not provided any revised proposal or FPR price information, we fail to see, and the protester has not shown, how WRS could have targeted its price in this manner. Further, we note that Kemron’s argument is premised on the idea that WRS knew it would be assured of an award if it targeted its FPR price to a level just below Kemron’s. In fact, there is no reasonable basis for assuming that WRS proceeded in this manner, since it did not know the number, identities, or prices of other offerors in the competition; WRS presumably would have been aware that keying its price to Kemron’s could have left it in an unfavorable competitive position vis‑a‑vis any other offerors. In addition, while the difference in Kemron’s and WRS’s prices was reduced from four to one percent between the initial proposals and FPRs, this difference was not simply the result of WRS’s increased price; rather, it was the result of a combination of WRS’s raising its price and Kemron’s lowering its own. Finally, regarding the alleged harm to the procurement system, it is undisputed that the disclosure of Kemron’s information was inadvertent, and that the agency and WRS proceeded appropriately once the disclosure was discovered. Since, as discussed above, we find that Kemron was not competitively harmed by the disclosure, there is no basis for finding the agency’s actions objectionable based on harm to the procurement system. We conclude here that there is no basis for finding that Kemron was competitively prejudiced by the agency’s inadvertent, limited disclosure of the firm’s pricing information.  (Kemron Environmental Services, Inc., B-299880, September 7, 2007)  (pdf)

We have recognized the right of a firm to protect its proprietary data from improper exposure in a solicitation in the context of a bid protest.  The Source, B-266362, Feb. 7, 1996, 96-1 CPD ¶ 48 at 2; Ingersoll-Rand Co., B-236391, Dec. 5, 1989, 89-2 CPD ¶ 517 at 2.  Where a protester alleges that proprietary information was improperly disclosed, the record must establish that the protester was competitively prejudiced by the release before we will sustain a protest.  Rothe Dev., Inc., B-279839, July 27, 1998, 98-2 CPD ¶ 31 at 2-3; Ursery Cos., Inc., B-258247, Dec. 29, 1994, 94-2 CPD ¶ 264 at 2.  The possibility of competitive prejudice may not be established on the basis of speculation.  Rothe Dev., Inc., supra, at 3; JL Assocs., Inc., B-239790, Oct. 1, 1990, 90-2 CPD ¶ 261 at 4-5. 
 
In the case at hand, even if we assume that production rates are proprietary information, we fail to see how Janico was competitively disadvantaged here.  First, the information in the RFP was not correct.  Second, it did not purport to cover all line items.  Third, DLA took action, both orally and in writing, to neutralize any competitive advantage by advising prospective offerors to disregard the information as being incorrect.  As a result, the effect of the release here on Janico's competitive position is speculative at best and, therefore, provides no basis for sustaining the protest.  Rothe Dev., Inc., supra, at 4; Ursery Cos., Inc., supra, at 3. (Janico Building Services, B-290683, July 1, 2002)

It is our view that, wherever an offeror has improperly obtained proprietary proposal information during the course of a procurement, the integrity of the procurement is at risk, and an agency's decision to disqualify the firm is generally reasonable, absent unusual circumstances. See Compliance Corp., supra (disqualification of offeror reasonable where based on its improperly obtaining or attempting to obtain competitor's proprietary information); NKF Eng'g, Inc., supra, at 6 (disqualification not unreasonable where there was "mere possibility" that offeror did not obtain an advantage from source selection information). This is certainly the case under the facts here, and we find the agency's action reasonable even without reference to the Act.  (Computer Technology Associates, Inc., B-288622, November 7, 2001)