RMG Systems, Ltd., B-281006, December 18, 1998

B-281006 Dec 18, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Agency reasonably determined that awardee of contract for safety inspections and covert in-transit surveillance of carriers approved to do business with Department of Defense (DOD) did not have an inherent conflict of interest based on business relationships with carriers. The contract primarily calls for (1) safety inspections of passenger motor carriers that have been approved by MTMC to do business with the Department of Defense (DOD) or that are applicants for MTMC/DOD approval. In order to evaluate compliance with safety and security regulations. /1/ RMG alleges that the award was improper due to organizational conflicts of interest. Were rated technically acceptable. Both were rated excellent under the technical and past performance factors and were rated low risk. View Decision Matter of: RMG Systems, Ltd. File: B-281006 Date: December 18, 1998 DIGEST Attorneys DECISION RMG Systems, Ltd. protests the award of a contract by the Military Traffic Management Command (MTMC), Department of the Army, to Consolidated Safety Services, Inc. (CSS) under request for proposals (RFP) No. DAMT01-98-R-2014. The contract primarily calls for (1) safety inspections of passenger motor carriers that have been approved by MTMC to do business with the Department of Defense (DOD) or that are applicants for MTMC/DOD approval, and (2) covert in-transit surveillance of DOD hazardous cargo and munitions shipments transported by motor carriers and railroads, in order to evaluate compliance with safety and security regulations. /1/ RMG alleges that the award was improper due to organizational conflicts of interest. We deny the protest. The RFP contemplated award of a fixed-price, indefinite-delivery, indefinite-quantity contract for a 1-year base period with 4 option years. It provided for award on a best-value basis with an evaluation based on price, technical, and past performance factors. Of six offers received, two--CSS's and RMG's--were rated technically acceptable. Both were rated excellent under the technical and past performance factors and were rated low risk. The agency thus made award to CSS based on its low price ($9,591,507 versus $13,943,006 for RMG). The RFP contained the following conflict of interest provision: Ethics: Government business shall be conducted in a manner above reproach, with complete impartiality and without preferential treatment. The performance of these services requires a high degree of public trust and an impeccable standard of conduct. Contractor personnel must avoid strictly any conflict of interest or even the appearance of a conflict of interest while performing their duties. Contractor employees shall not solicit or accept, directly or indirectly, any gratuity, gift, entertainment, loan, or anything of value from anyone receiving inspections and/or under surveillance through this contract. The offer or acceptance of a bribe is prohibited by 18 U.S.C. 201, 10 U.S.C. 2207, 5 U.S.C. 7353, and 5 CFR Part 2635. RFP, Performance Work Statement Sec. 1.2.6 at 3. In the past performance section of its offer, CSS noted that it had performed "annual safety fitness evaluations . . . to determine compliance levels with federal, state and local requirements" for Landstar Systems, Inc., which is a holding company for several DOD-approved munitions carriers that would be subject to the safety inspections and surveillance under the current contract. CSS "recognize[d] that maintaining Landstar Systems, Inc. as a client could be a potential conflict of interest," and stated that it was "willing to discontinue [its] services with Landstar, upon award of this proposed contract." CSS Offer, Past Performance Information (unpaginated). The agency concluded that CSS's proposed plan would eliminate the cited potential conflict of interest. /2/ The proposal contained no other information bearing on potential conflicts. RMG asserts that CSS will have a conflict of interest under the contract based on CSS's affiliation with the International Motor Carrier Audit Commission (IMCAC) (two of CSS's five principals own IMCAC), a private organization that performs the same type of safety inspections as under the awarded contract for private sector clients that would be subject to inspection under the awarded contract. /3/ More specifically, according to RMG, because IMCAC is in the business of providing safety ratings and inspection services to carriers, and accepts payment from carriers (including MTMC/DOD carriers) in return for these ratings and services, CSS, by virtue of common ownership with IMCAC, will not be able to maintain its objectivity in performing DOD safety inspections and in-transit surveillance of the same carriers under this contract.