GAO bows to CIA decision to waive conflicts of interest

The Government Accountability Office recently defended the CIA’s decision to waive a contractor’s organizational conflict of interest, shedding light on its view of the rarely used waiver.

“Where a procurement decision — such as whether an OCI should be waived — is committed by statute or regulation to the discretion of agency officials, our office will not make an independent determination of the matter,” GAO wrote in the decision released Aug. 17.

GAO’s ruling is evidence that it won’t second-guess agency officials' decisions to waive OCIs, said Peter Eyre, a government contracts attorney at Crowell and Moring.

“It appears that GAO is not going to question the agency and will defer to its determination,” as long as agency officials meet certain criteria set out in the Federal Acquisition Regulation, Eyre said.

GAO denied a bid protest on Aug. 17 from MCR Federal, which, among other things, challenged the CIA’s use of the waiver. The company protested the CIA's contract award to Scitor Corp. for cost analysis and research support services for the Office of the Director of National Intelligence's Cost Analysis Improvement Group.

Before the final award, though, the CIA corrected its request for proposals due to a conflict of interest regarding Scitor. But during the revision, the agency concluded that the pool of contractors with appropriate security clearances would be too small if every company with a possible conflict was ineligible to compete. It would be "highly doubtful" that the CIA would find cleared employees to do the work. Officials then decided the pool was small enough to sign the OCI waiver, according to GAO’s decision.

Many experts in the government contracting community were unsure how much scrutiny GAO would use to consider the OCI waiver issue, Eyre said. To date, agency officials have used OCI waivers sparingly, and the issue hasn’t come before GAO for a number of years.

OCIs have become a red-hot issue in the past few years. Congress and the administration are attempting to build greater safeguards, keeping companies from gaining any competitive advantage or unduly influencing a contractor in their own favor.