Ktech

Ktech TITLE: Ktech Corporation, B-285330; B-285330.2, August 17, 2000 BNUMBER: B-285330; B-285330.2 DATE: August 17, 2000 ********************************************************************** DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Ktech Corporation File: B-285330; B-285330.2 Date: August 17, 2000 Robert S. Gardner, Esq., for the protester. Thomas F. Burke, Esq., McKenna & Cuneo, for Maxwell Technologies, an intervenor. David C. Rickard, Esq., Defense Threat Reduction Agency, for the agency. Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that awardee's subcontractor has impermissible conflict of interest is sustained where record shows that agency did not consider possibility that subcontractor may have improperly obtained, through performance of earlier government contract, information confidential to protester and used it to enhance capabilities made available to awardee, and agency did not analyze possible conflicting roles that subcontractor may be required to perform under protested contract and subcontractor's other government work. DECISION Ktech Corporation protests the award of a contract to Maxwell Technologies under request for proposals (RFP) No. DTRA01-00-R-0009, issued by the Defense Threat Reduction Agency (DTRA) for the operation of a magnetic flyer plate facility, and the performance of certain tests within the facility. Ktech asserts that the awardee has an impermissible organizational conflict of interest, that the agency made its award decision on a basis other than that announced during the acquisition, and that the agency failed to conduct meaningful discussions with it. We sustain the protest. BACKGROUND The solicitation contemplated the award of a cost-reimbursement contract to perform various services in connection with the operation of the agency's magnetic flyer plate (mag flyer) facility in Albuquerque, New Mexico. This facility is used for testing reentry bodies (RBs)[1] to ensure that they are sufficiently 'hardened' against forces and effects that might occur in a hostile environment. RFP Statement of Work (SOW) at 1. The work to be performed under the RFP is divided into three phases. Under phase 1, the agency's mag flyer facility is to be brought up to full operational status (the facility had been previously 'mothballed'). Included under phase 1 are the design, manufacture, integration testing and evaluation of all equipment necessary to conduct the tests. Id. Under phase 2 (an option under the contract), the contractor is required to conduct calibration of the equipment, and to execute full scale testing on two RBs. Id. The agency contemplated that the phase 1 work would take approximately 12 months and that the phase 2 work would take approximately 6 months (4 months for testing and 2 months for reporting the data). Commerce Business Daily, Nov. 23, 1999. Testimony at the hearing that our Office conducted in this matter shows that the agency originally intended to obtain the test data by July 1, 2001. Hearing Transcript (Tr.) at 75. Under phase 3 (also optional), the contractor is required to provide support that will keep the facility safe and secure for a period of 1 year, and to provide the government with cost estimates for performing any additional tests approved by the agency. SOW at 6. Technical considerations were more important than price, price was more important than past performance considerations, and technical and past performance considerations, when combined, were significantly more important than price. RFP at 46-47. Award was to be made on a best value basis. Id. The agency received three initial proposals, two of which (Maxwell's and Ktech's) were included in the competitive range. The agency engaged in discussions with both firms and obtained final proposal revisions (FPR). [deleted]. Memorandum from the Source Selection Evaluation Board (SSEB) to the Contracting Officer, Source Selection Recommendation at 1-2 (Mar. 10, 2000). [deleted]. Id. at 4. Subsequent to the March 10 recommendation, members of the source selection evaluation board (SSEB) met with other agency officials [deleted]. Tr. at 76-77, 172, 181-84, 302-08. On the basis of these meetings, the SSEB members prepared a second memorandum dated March 30 [deleted]. The agency proceeded with the award and, after a debriefing, this protest followed. ORGANIZATIONAL CONFLICT OF INTEREST (OCI) Ktech asserts that award to Maxwell was improper due to an OCI arising out of the activities of one of its subcontractors, ITT Industries.