Deutsche Bank, B-289111, December 12, 2001

B-289111 Dec 12, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights The awardee had an organizational conflict of interest that was not properly mitigated. Is denied where the record shows that the contracting agency reasonably determined that the awardee's proposal adequately mitigated any conflict of interest through the use of a subcontractor to perform loan servicing on those properties where the awardee had previously been involved in handling administrative matters for the agency related to the same properties. It contends that the agency's evaluation was improperly based on a different estimate of the number of properties than identified in the RFP. The RFQ here was issued electronically on May 8. The competition for this task order was limited to companies holding a Federal Supply Schedule (FSS) contract (FSS No. View Decision Deutsche Bank, B-289111, December 12, 2001 DIGEST Attorneys DECISION Deutsche Bank protests the issuance of a task order to Real Estate Recovery, Inc. (RER) by the Department of Housing and Urban Development's (HUD) Office of Multifamily Housing Assistance and Restructuring (OMHAR) under request for quotations (RFQ) No. R-OPC-21968, issued to procure support services related to loans issued in support of HUD's Mark-to-Market program. /1/ Deutsche Bank argues that the awardee has an organizational conflict of interest that the agency has failed to properly mitigate. In addition, it contends that the agency's evaluation was improperly based on a different estimate of the number of properties than identified in the RFP. We deny the protest. The RFQ here was issued electronically on May 8, 2001, and anticipated issuance of a fixed-price task order for loan and other asset servicing, plus management of mortgages for multifamily housing projects, for a base period of 18 months, followed by three 1-year options, and one 6-month option. The solicitation advised that award would be made to the vendor whose quotation represented the best value to the government, defined here as the quotation demonstrating "the greatest potential to provide the most timely, efficient, and cost-effective approach to servicing/management of assigned mortgages eligible for the [M2M program]." RFQ at 5. The competition for this task order was limited to companies holding a Federal Supply Schedule (FSS) contract (FSS No. SIN 621-4) with the General Services Administration (GSA) for "Loan and Other Asset Servicing/Management Services." Id. at 1. By the May 25 closing date, HUD received quotes from four vendors. Upon completion of an oral presentation by each vendor, followed by submission of revised quotes, the agency's technical evaluation panel (TEP) assigned a rating to each vendor in the areas of technical ability, prior experience, and past performance, as well as an overall summary rating, none of which are at issue in this protest. Because RER had the highest overall ratings and the lowest total price, the TEP recommended issuance of the task order to RER for its price of $15,604,621. The task order was issued on September 25, and this protest followed. The protester's conflict of interest argument is based on RER's role as a participating administrative entity (PAE) in HUD's M2M program. /2/ The statement of work (SOW) appended to this RFQ expressly advised potential vendors that contractors who had served as PAEs for HUD would be allowed to participate in this procurement, and that the agency would consider their proposals about how any conflicts of interest arising from their dual role might be mitigated, as follows: Participation in the M2M program as a PAE, lender, or otherwise, will not disqualify an offeror, provided that, in its response or prior thereto, the offeror discloses all actual or appearance conflicts of interest and proposes methods, acceptable to OMHAR/HUD in its sole discretion, that satisfactorily mitigate such conflicts. SOW at 16. In alleging that RER has an organizational conflict of interest that has not been properly mitigated, Deutsche Bank raises two arguments. First, it argues that RER's role as a PAE places the company in the unique position of overseeing its own performance, thus creating a conflict in RER's ability to provide impartial assistance to the agency. Second, it argues that RER's role as a PAE gave the company access to information not available to non-PAE vendors, and that this information provided RER with an unfair competitive advantage. Under either theory, Deutsche Bank argues that RER is not eligible for award here. An organizational conflict of interest occurs where, because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the government, or the person's objectivity in performing the contract work is or might otherwise be impaired, or a person has an unfair competitive advantage. Federal Acquisition Regulation (FAR) Sec. 9.501.