Radian protested the award to Chenega to design and develop a “Camel” transportable water system asserting there was an organizational conflict of interest and that Chenega would not satisfy the rule that at least 50 percent of the cost of the contract be performed by the prime contractor.  As for the OCI, Radian claimed that through its work on other contracts, Chenega may have shaped the Camel requirements or procurement rules in its favor, had access to government documents and other information about the acquisition that the other offerors did not have and had access to proprietary information of its competitors under the Camel solicitation.  The GAO rejected the OCI claim saying substantial facts and hard evidence are needed to establish a conflict not just inference or suspicion of an actual or apparent conflict.  None of the OCI allegations “rise above innuendo and suspicion.”

With regard to the 50 percent rule, GAO said much of the argument that Chenega would not satisfy the rule was based on the assertion that the award was only for the prototype work while the production quantities could not be considered because they were “speculative”.  The GAO disagreed saying the prototype is merely the initial order while the production quantities are part of the contract as a whole because when there is no option years, as here, the subcontracting limitation applies to the contract as a whole, not to individual task or delivery orders.  Stressing the contract is for supplies, not services, the 50 percent rule is different: for a supply contract, the 50 percent rule applies to total contract cost – including profit – less materials and subcontracting costs to be compared with all subcontracting costs less the same types of costs.  In contrast, for services contracts, overhead costs, G&A costs and profit should be excluded from the computation of the total contract cost (Mechanical Equipment Co. GAO, B-292789).

{TAG_FORM_TITLE}