Case of the Month – October 2020: AT&T Corporation

PCI has started a new webinar series, the Case of the Month Club.  Each month PCI’s Government Contracts law experts will discuss one or two recent cases.  The first October case is AT&T Coproration. If you want to learn more about the Case of the Month Club, click here.

AT&T Corporation
United States Court of Appeals for the Federal Circuit
Decided July 2, 2020

Facts:   The SSA awarded Verizon a  $525 million contract to combine three legacy telephone systems into a single system.  The award was protested and the SSA took corrective action.  During the period of corrective action, the SSA awarded Verizon a separate task order on a different contract (herein “task order”) to provide the backbone infrastructure for some of the services on the initial contract.  When the SSA finishes the corrective action, it reaffirms its award to Verizon.

AT&T protests the award on the grounds that Verizon has an impaired objectivity conflict of interest.  AT&T argues that the SSA contract requires Verizon to report problems with the services provided under the task order.  The agency claims that AT&T should have protested prior to award.

Issue:  Was this protest filed timely, where the potential for an OCI was known, but the potentially conflicted offeror’s status as an eligible bidder was unknown?

Was there an impaired objectivity conflict of interest?

Holding: The protest was filed timely.

There is a conflict of interest.

Reasoning:  Timeliness. Generally, a protestor is “not required to file a protest that another firm has an impermissible OCI until after that firm has been selected for award.”  However, a protestor is required to file when a solicitation is used on an unrestricted basis, knows the facts contributing to the OCI, and knows that a potentially conflicted firm is eligible for award.  Offerors do not need to file a pre-award protest for an OCI until after an agency has advised that it has completed its OCI review finding that a potentially conflicted offeror is eligible for award.

In this case, the reconsideration included discussions and several follow-up questions concerning OCIs.  However, the agency never definitively communicated whether Verizon was eligible for award given the new follow-up questions concerning OCIs.  The protest did not need to be filed pre-award and is therefore timely.

Organizational Conflict of Interest. An impaired objectivity conflict of interest is found when “a firm’s ability to render impartial advice to the government will be undermined by its relationship to the product or service being evaluated.”  Verizon working on the SSA task order fits that definition relative to this contract.  Therefore, there was a conflict of interest.

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