How foosball killed this $700M NASA win

NASA needs to start from scratch with a $700 million-plus contract for operations support at the Marshall Space Flight Center after the Government Accountability Office ruled that an agency employee had a personal conflict of interest.

NASA originally awarded the contract to SGT Inc., which KBR acquired in 2018. The agency picked SGT over Teledyne Brown Engineering in June because while the two companies had equal non-price scores, the price on SGT’s bid was lower.

Teledyne challenged how the evaluations were conducted. But the winning argument with GAO was that a NASA employee -- called Mr. X in the GAO decision -- had a friendship over three decades with an employee of the incumbent contractor Colsa.

Colsa was a major subcontractor to SGT on its bid. Mr. X and that Colsa employee met weekly as part of a social group for the last 10 years. Mr. X described the regular event as a “gathering for camaraderie, friendship, dinner and to engage in competitive foosball.” The group is comprised of about 10 friends in various occupations.

Early in the procurement, Mr. X informed NASA’s legal department of the friendship and the weekly gathering. He was told to be “careful and not to have the appearance of a conflict.”

As the procurement moved along, Mr. X raised his friendship several times with NASA. In an email cited in the GAO decision, Mr. X said he waited for a written response to his request for an “impartiality determination before executing his individual certificate for evaluation participants.”

NASA's ethics office didn’t weigh in on his participation until after Mr. X was appointed to the Source Evaluation Board. The ethics office recommended he be removed “in an abundance of caution.” Or Mr. X could stop attending the weekly foosball games until after the Source Evaluation Board had finished its work.

But Mr. X declined to stop attending the games. The procurement office decided that the conflict could be mitigated by Mr. X adhering to procurement integrity regulations, not talking about the contract at the social gatherings and that he would not participate in evaluating a bid that included Colsa.

GAO ruled that the mitigation plan wasn’t good enough because it failed to address how deeply Mr. X was involved in the procurement.

The GAO decision describes how Mr. X led efforts to develop the contract’s requirements and performance work statement. He also presented the procurement strategy at public events. He also was appointed to the Source Evaluation Board. Mr. X helped brief the Source Selection Authority on the evaluation and recommendations of the board.

“The record shows that Mr. X exercised an ongoing, continuous leadership role in the development of virtually every aspect of the agency’s acquisition, from formulating procurement strategy, contracting approaches, and cost estimates, to evaluating risks, to developing the central acquisition documents,” GAO wrote.

Because of that deep involvement in the procurement, GAO decided NASA’s so-called mitigation plan was inadequate. Because of the conflict of interest ruling, GAO didn't weigh in on Teledyne's other claims of problems with how the evaluation was conducted.

GAO has told NASA to cancel the award to SGT and cancel the solicitation so it can start the acquisition over without Mr. X’s involvement. NASA also needs to reimburse Teledyne’s costs.